Intel’s Plans to Expand Production in China Freeze After Deliberations w/ the US Gov.

Intel’s plans to develop wafer manufacturing in Chengdu, China have come to a standstill after deliberations with the US authorities. The chipmaker had proposed utilizing a manufacturing facility within the area to fabricate silicon wafers to ease the semiconductor shortages which have been affecting nearly each trade over the previous yr and a half. The manufacturing facility was anticipated to come back on-line by the top of 2022 and assist increase Workforce Blue’s manufacturing capability. Nevertheless, it appears like Pat and Co. must have a look at different venues to extend Intel’s chip output.

The Biden administration was fast to reject the plan over “safety considerations”. Whereas Intel is free to go forward and improve manufacturing wherever it deems match, it doesn’t need to miss out on the $52 billion funding accompanying the CHIPS Act. The proposal known as the CHIPS Act has been caught in the home for months, with Biden and the Commerce Secretary pitching it as a measure to counter China’s rising affect within the semiconductor trade.

In a press release, Intel stays open to different options that can even assist us meet the excessive demand for semiconductors important to innovation and the financial system. Intel and the Biden administration share a objective to handle the continued industrywide scarcity of microchips, and we have now explored various approaches with the U.S. authorities. Our focus is on the numerous ongoing enlargement of our present semiconductor manufacturing operations and our plans to take a position tens of billions of {dollars} in new wafer fabrication vegetation within the U.S. and Europe.


Intel didn’t immediately touch upon the information, however it’s understood that the chipmaker has halted any plans to extend manufacturing in China in the meanwhile. Regardless, if we’re being fully trustworthy, shifting the provision chain in its entirety to US soil is solely not possible, as indicated by the TSMC founder:

If you wish to reestablish a whole semiconductor provide chain within the U.S., you’ll not discover it as a doable activity. Even after you spend lots of of billions of {dollars}, you’ll nonetheless discover the provision chain to be incomplete, and you will see that that it will likely be a really excessive value, a lot larger prices than what you at the moment have.Previously, firms within the U.S. or in Asia had been rising and prospering because of globalization and free commerce. Nicely, Tom, the world is just not flat anymore. That is going to be a problem for the Asian semiconductor trade, international semiconductor trade, together with Intel.

Morris Chang, TSMC founder

At current, the US accounts for simply 12% of the worldwide semiconductor provide chain, down from 37% within the Nineteen Nineties. Taiwan, adopted by China and Korea deal with the majority of it on account of low cost labor and different financial components. The founding father of TSMC (Morris Chang) has been adamant that transferring the provision chain to America is financially undesirable, even when the US authorities spent much more than the presently allotted $52 billion.

He took a shot at Intel CEO Pat Gelsinger (not directly), saying that folks advocating for transferring the semiconductor manufacturing to US soil are pushed by self-interest. Gelsinger has been very vocal in his help for home-manufactured chips, pressurizing the US authorities for extra funding.

China is the biggest client of semiconductors, serving because the meeting heart for a lot of the world’s client electronics. This has been the case over the past 10 years or so. Nevertheless, with the commerce conflict intensifying, numerous sanctions and restrictions have compelled producers to rethink their technique and probably transfer manufacturing to extra secure areas.

Intel is well the obvious benefactor of the CHIPS act. The chipmaker plans to develop manufacturing and open new vegetation in Arizona and throughout the US to spice up manufacturing and improve job alternatives. Nevertheless, none of those are slated to go surfing earlier than 2023. This offers rival TSMC and Samsung loads of time to determine an unassailable lead over the US-based chipmaker.

Supply: Bloomberg

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