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Intel China Government

US Government Discourages Intel's Plans to Ease Chip Shortage By Expanding in China (msn.com) 107

Posted by EditorDavid from the chips-from-China dept.
"Intel's plan to ease the ongoing chip shortage by increasing production in China has reportedly been opposed by the Biden administration," writes PC Magazine, "over concerns about the potential security impact." Bloomberg reports that Intel wanted to manufacture silicon wafers in a factory located in Chengdu, China by the end of 2022. When the company recently shared details of this plan with the U.S. government, however, "Biden administration officials strongly discouraged the move." The report doesn't specify the exact nature of the White House's security concerns. Relations between the U.S. and China have reached the point where it could be anything from a fear of Intel's designs being stolen to the possibility of the processors being compromised in some way.
Bloomberg reports that Intel has also been seeking federal assistance "to ramp up research and production in the U.S.," with Intel adding in a statement that "Intel and the Biden administration share a goal to address the ongoing industrywide shortage of microchips, and we have explored a number of approaches with the U.S. government. Our focus is on the significant ongoing expansion of our existing semiconductor manufacturing operations and our plans to invest tens of billions of dollars in new wafer fabrication plants in the U.S. and Europe."

But PC Magazine points out that "Much of that money is coming from government sources, however, which is part of the reason why the White House was briefed on Intel's plan to increase production in China to begin with."

Bloomberg reports that the Biden administration "is scrambling to address constraints, but it's also trying to bring production of vital components back to the U.S. — a goal Intel's China plan didn't serve..." The episode comes as the White House is debating whether to restrict certain strategic investments into China. National Security Adviser Jake Sullivan has said the administration is considering an outbound investment screening mechanism and is working with allies on what it could look like... A representative for the White House declined to comment on specific transactions or investments, but said the administration is "very focused on preventing China from using U.S. technologies, know-how and investment to develop state-of-the-art capabilities," which could contribute to human rights abuses or activities that threaten U.S. national security...

Following deliberations with the Biden team, Intel has no plans to add the production in China at the moment, a person familiar with the decision said...

The chip industry has a complicated relationship with China, one that became much more difficult during the Trump administration's trade war. China is the biggest consumer of semiconductors for local use, and it serves as the assembly center for much of the world's electronics. To help with logistics and to keep Beijing happy, chipmakers — including Intel — have located plants there. But they face longstanding U.S. government restrictions that prevent them from exporting cutting-edge semiconductors to the country.
At the same time, the article points out, automakers "are losing more than $200 billion in revenue because of the lack of chips," while Apple "expects to miss out on more than $6 billion of sales this quarter because it can't get enough components."
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US Government Discourages Intel's Plans to Ease Chip Shortage By Expanding in China More

US Government Discourages Intel's Plans to Ease Chip Shortage By Expanding in China

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  • Why Does Intel Need to Even Be Reminded? (Score:4, Interesting)

    by Terrigena ( 782337 ) on Saturday November 13, 2021 @08:04PM (#61985373)
    Why does the US government even need to remind Intel executives of the risk associated with expanding production in China? We're almost two years into a public health situation that was actively concealed by the Chinese government, and now we're facing chip shortages and supply chain problems that are reverberations of the Chinese government's early subterfuge.

    If these corporate socialists believe "diversity is strength" maybe they should diversify production outside of China and stop infusing the country with American capital and intellectual property that can't ever be extracted and will only be held hostage.

    • Re:Why Does Intel Need to Even Be Reminded? (Score:5, Insightful)

      by PolygamousRanchKid ( 1290638 ) on Saturday November 13, 2021 @08:10PM (#61985383)

      Why does the US government even need to remind Intel executives of the risk associated with expanding production in China?

      The Intel executives don't need to be reminded.

      The Intel executives are just reminding the US government to pack a few billions for them in the new spending bills . . .

      . . . or else they have the option of going to China . . .

    • Re: Why Does Intel Need to Even Be Reminded? (Score:5, Insightful)

      by DrMrLordX ( 559371 ) on Saturday November 13, 2021 @08:15PM (#61985389)

      Intel already has a fab in China. They tend to fab on older processes over there so as not to risk bleeding edge IP.

      What they really plan on doing in Chengdu is anyone's guess. If they're building a facility from the ground up, it probably has already been in the works since ~2019 since it takes about three years to bring a fab online.

      It should be noted that Intel already has a package&test facility in Chengdu. That doesn't seem to be the subject of the article. Their current fab is in Dalian.

    • ...that was actively concealed by the Chinese Government..."

      False

      • Re: (Score:2)

        by NFN_NLN ( 633283 )

        Snopes said it is "MOSTLY FALSE" that China leaked the virus on a Tuesday, because it is believed it could have been a Saturday or Sunday.

        • Snopes said it is "MOSTLY FALSE" that China leaked the virus on a Tuesday, because it is believed it could have been a Saturday or Sunday.

          link please

      • Re: (Score:2)

        by Junta ( 36770 )

        It is true, the Chinese government arrested Chinese doctors and journalists for reporting on the outbreak, at least one of whom has seemingly never been seen again without report of what happened to him.

        • They were given a gag order to prevent widespread panic in a major population area.
          The government was investigating the claims in the background as it happened.

          • Re: (Score:2)

            by Junta ( 36770 )

            Regardless of if you think they were justified in concealing the outbreak, they absolutely did want to conceal the outbreak. They might have eventually worked to help address the issue when it was impossible to deny anymore, but they tried to hide the outbreak. Also, all along the way they kept promoting misinformation, such as saying it came from Italy or India or that Pfizer's vaccine didn't work.

        • at least one of whom has seemingly never been seen again without report of what happened to him.
          He died to COVID in a hospital. Which is actually common knowledge.

        • Link please. If a Nutter site, you're in for a whacking

    • What the hell is a corporate socialist? You are making up terms. What's next? Statist libertarian? If anything socialism is the thing telling them where and how they can do business.

    • into a public health situation that was actively concealed by the Chinese government,
      That is wrong. This is American propaganda.

      Why does the US government even need to remind Intel executives of the risk associated with expanding production in China?
      Because Intel is a capitalist company that wants to make capitalist money in capitalist China.

  • Logistics vs. Strategic (Score:4, Insightful)

    by crow ( 16139 ) on Saturday November 13, 2021 @08:48PM (#61985451) Homepage Journal

    Logistically, it makes sense for Intel to make its chips close to where they will be bought. I would think a very large portion are put into computers assembled in China, so it would make sense to keep the whole supply chain localized.

    Strategically, the USA as a country want to minimize its dependence on China. There's already far too much dependence such that tariffs on China have as much impact on US consumers as on China. This makes for a weak position on trade negotiations, let alone the ability to levy sanctions or god forbid, war.

    • USA buys iPhones from China. China buys food from the US. In any trade war US can hold out much longer.

    • There's already far too much dependence such that tariffs on China have as much impact on US consumers as on China.

      That's the idea, basically. Then the US consumers pressure the US corporations to actually produce in the US, and the invisible hand pushes things in that direction since the other direction is no longer as profitable.

      The problem is trying to do everything all at once. But that problem has been created by not doing anything for so long, so that there's now so much to do. We can either choose to do nothing, or choose to accept the pain caused by waiting so long to fix the problem. It's like getting shot and

  • Many people are already very impatient to have the US completely decouple with China, the US govt should simply just ban Intel from setting up new fabs in China (already very gentle in not telling them to close existing fabs). "National Security", need any more reason?

    How can the US decouple if US companies keep expanding and making profits in China??

    Only after the US completely decoupled with China can Americans see for a fact how much China depended on America.

    • You do realize that US companies don't 'go into China' for the fun of it, or as some kind of charity. They do it for the profits.
      Decupling from China is just forgoing those profits. It's shooting themselves in the foot.
      China would be quite happy to have most American companies replaced by Chinese companies and keep those profits for themselves.
      China used to be desperate for American capital and knowhow. But they aren't so much any more. They absorbed that knowhow for themselves and have a big savings glu
      • China would have a difficult time keeping up if American businesses stopped taking intellectual property to China for them to steal. The are, of course, other ways to gather the information but noone not nearly as easy.

        • Re: (Score:2)

          by GuB-42 ( 2483988 )

          Yes, it will be hard time for China, but they are not completely helpless anymore. And that's reason why the US government is not happy.
          They essentially have already stolen everything there is to steal, they have closed the gap. They can continue stealing to keep up, but they can also do their own research, and they already do.
          Both countries will have a hard time without the other, but it is not clear which one will be worse off

          One thing is clear however, the days of taking advantage of Chinese quasi-slave

  • WT actual f Intel (Score:3)

    by hdyoung ( 5182939 ) on Saturday November 13, 2021 @09:17PM (#61985497)
    I cant think of a more out-of-touch proposal. Seriously. What the hell are the people at intel thinking? THIS is their solution to dropping from number 1 to 3 on the processor charts? They must really be running out of ideas. It makes me sad but I guess the time that intel was the undisputed processor champion truly is in the history books. Seriously hope TSMC moves to the US before China takes the island by force.

  • Its not exactly a secret that China wants domestic production of advanced semiconductors with the same high tech stuff that the likes of TSMC, Intel and Samsung are using.

    Letting Intel build an advanced fab in China creates a risk that the Chinese will steal some of the secrets to advanced chip-making and make it easier for the Chinese to achieve their goals.

  • Why don't we work towards all nations getting along? This BS is going to escalate to World War 3 which is a zero-winner war. The way we're heading, in the year 2100 the world's most powerful nation will be the tiny South Pacific nation Tuvalu --- and they don't even have a military.

    • You should be asking that question of Xi Xinping.

    • Why don't we work towards all nations getting along?

      That's a great goal, but the problem is that the nations on top never want to get along, because that means sharing the wealth. And such nations always want to stay on top regardless of the cost for other nations. The most powerful nations have literally always found other nations to exploit, and then gone on to exploit them. You're talking about a fundamental shift in human nature and the way we run our societies, and while I don't see any way for humanity to survive in the long term without it, I also don

    • Only if Tuvalu learns to breathe seawater.

  • No need to fear the chip IP being stolen, it's an inevitable outcome. Just need to accept it as a cost of doing business there. I'd be shocked if Intel has any serious doubt whatever is placed in China will be copied. Files, schematics, materials... The CCP will examine everything in the building. Any Chinese worker that has physical access... Well, if (s}he loves their family, they'll copy everything.

    • Re: (Score:1)

      by Anonymous Coward

      The CCP will examine everything in the building. Any Chinese worker that has physical access...

      You seem to be under the delusion that any other country in the same situation wouldn't do the same. You know all countries than can spy spy.

      Well, if (s}he loves their family, they'll copy everything.

      You act as if people don't support their own country unless threatened to. A bit of cash would easily be enough to convince those on the fence, scared of getting caught or whatever.

      You seem to be living in a comic book. Or you are just quite gullible.

  • A better target for federal funds, IMO. If Intel falls on it's face, the plants will still have other architectures to produce.

  • The shortage is artificial. There was no shortage till Trump sanctioned Huawei and they decided to stockpile. They bought up 5 years of their normal demand to be delivered over 2 years (Existing orders are honored under the sanctions). This caused a pig in the python effect.

    Biden is trying to be Trump 2.0 by ameliorating the shortage outside China while creating one inside China by sabotaging efforts to Make in China .

    One only wonders what will be the side-effects of China's counter

    • The shortage is artificial. There was no shortage till Trump sanctioned Huawei and they decided to stockpile.

      You think Huawei is stockpiling what that is affecting everyone else? Wafers?

      • Re: (Score:2)

        by ghoul ( 157158 )
        Fab capacity. They placed 5 years worth of orders to be filled in 2 years blocking fabs for 2 years. It got worrse when Automakers cancelled orders at the beginning of the pandemic. Huawei orders got that Fab capacity. When Automakers came back no fab capacity was available.

  • I lost my job at Intel in part (Score:1)

    by Anonymous Coward

    because I refused to be a part of transferring technology to China that was clearly specified as being restricted per US rules.

    That was before I understood just how much the almighty dollar runs roughshod over any rules or laws.

    • Re: (Score:1)

      by Anonymous Coward

      You would have made more money if you'd filed a whistleblower complaint, or packed even a shed of evidence and found a lawyer.

      • Re: (Score:2)

        by jvkjvk ( 102057 )

        Exactly.

        This stuff is really no joke to the government. Bullshit about clearly specified restricted technology being transferred and no one caring about it.

    • Re: (Score:1)

      by Anonymous Coward

      But don't you feel better about getting out from under those mendacious, backstabbing,
      inept managers and sales weasels? Do you miss those propaganda posters hanging
      everywhere telling you about innovation and teamwork? That the old boy network
      waxing nostalgic for the years of peak Wintel, while chasing and failing to replicate
      whatever tech fad is making news, burning whatever x86 cash is left? Meritocracy my ass.

      TSMC will sweep in, gleaning whatever talent is left, and the rest will shrivel and die on the
      gol

  • it could be anything from a fear of Intel's designs being stolen to the possibility of the processors being compromised in some way.

    Or, I don't know, maybe it's a bad idea to be overly dependent on potentially hostile nations for components critical to national security. Just spitballin' here.

  • Intel apparently is not content with just doing expansion plan on the FAB plants in Scottsdale, AZ, Chandler AZ, Hillsboro, OR and one in New Mexico.

    Apparently, it is cheaper to start a new one elsewhere, preferably where there is less regulatory agenda.

  • Not merely a society w ith an enemy government. All apologists should be considered shills and Americans who invest there are economic traitors in effect if not intent.

    Every measure should be taken to divest not invest in the nation which is the main reason America spends trillions on our Pacific fleet to contain. Beijing is a genocidal menace as Uighers know all too well.

  • Whatever tech China needs but doesn't have is just a matter of them making their own alternatives.

    They are pumping 14nm in low volume now without US tech. They are finalizing 8nm designs and will begin production in a year or so.

    As for designs, they have top talent and a lot of it.

    Want to talk national security concerns? Just force China to not need anything from the US while America would be knocked into the dark ages without China.

    Has anyone checked the prices and availability of small industrial motors i

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