The White House reportedly dissuaded Intel from manufacturing more silicon wafers in China.

Big picture: Intel is trying to build a more resilient supply chain for its chipmaking efforts, but the company won’t be able to do so in China. The trade war between China and the United States is forcing the chipmaker to take a tough path when it comes to making more silicon wafers, which means an ongoing shortage of chips will persist until at least 2023.

Intel is currently working to expand its manufacturing capacity as part of its IDM 2.0 initiative. The company plans to become a strong competitor to chip makers like TSMC and Samsung, and even wants to become a leader in processing and packaging technologies by 2025. Both of these goals are very ambitious and will require a lot of engineering talent and financial investment, but global politics can create serious obstacles to this.

According to Bloomberg reportIntel is trying to speed up chip production in China to address its ongoing chip shortage. However, the White House is said to have “vehemently opposed” these plans as they interfere with President Biden’s security policies and domestic manufacturing efforts.

The company wanted to manufacture silicon wafers at a facility in Chengdu, China that could be operational by the end of 2022. When the Biden administration raised concerns about potential security issues, Intel agreed to delay those plans and focus on finding alternatives. solutions.

Intel relies on government subsidies and tax breaks to build its U.S. manufacturing facilities, so it has to appease regulators when it comes to making that choice. Alternatively, the company is evaluating the possibility of building similar facilities in the United States and Europe.

This could prolong the chip shortage and hurt Intel’s manufacturing goals in the short term, but the company appears willing to make those trade-offs and agree with the Biden administration’s goal of manufacturing core components in the United States.

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