White House spurns Intel's plan to boost chip production in China

[Daniel Nenni]

Quite the chess game. Is this a "give us money or we will expand in China" move? "Mr Gelsinger has argued that relying too much on outsourced production in Asia is a supply chain risk. He has lobbied for public money around the world to support spreading chipmaking capabilities to different areas." So let's expand in China?

WASHINGTON (BLOOMBERG) - The Joe Biden administration has spurned a plan by Intel to increase production in China over security concerns, dealing a setback to an idea pitched as a fix for US chip shortages, according to people familiar with the deliberations.

White House spurns Intel's plan to boost chip production in China

Intel said it is open to other solutions that will help it meet high demand. Read more at straitstimes.com. Read more at straitstimes.com.

www.straitstimes.com

 

[hist78]

It might be an indication that although Intel is surely to get certain amount of the taxpayers' money through the CHIPS act, the actual amount is much smaller than Intel demanded.

Somehow Intel feels they can use an investment plan in China to put pressure on the Federal government in order to get more money.

 

[tonyget]

I thought Intel sold their DaLian fab to SK Hynix

 

[hist78]

This is another news report related to the US investment in PRC's semiconductor industry.

WSJ News Exclusive | U.S. Companies Aid China’s Bid for Chip Dominance Despite Security Concerns

U.S. companies and their China affiliates are ramping up investment in Chinese semiconductor companies, aiding Beijing’s bid for chip-sector dominance and complicating Washington’s efforts to preserve America’s lead.

www.wsj.com

The direction of US policymakers and Congress are going towards the so-called "decoupling" with PRC. This policy got very strong bipartisan support in Washington. Intel's proposal to increase automotive related production in China is a head-on crash with White House and Congress.

Why Intel even bother to suggest this project?

Basically Intel is saying because automobile industry is so critical to the American interest and currently that industry is struggling to get enough chips, Intel will step up their production in PRC, #1 enemy of USA, to resolve the chips shortage. And making more chips in PRC will reduce US reliance on foreign made chip products.

Isn't that a strange reason, if not a stupid one?

 

[count]

Intel being Intel. The company would rather play these kinds of games vs actually try to compete.

 

[lilo777]

This is another news report related to the US investment in PRC's semiconductor industry.

WSJ News Exclusive | U.S. Companies Aid China’s Bid for Chip Dominance Despite Security Concerns

U.S. companies and their China affiliates are ramping up investment in Chinese semiconductor companies, aiding Beijing’s bid for chip-sector dominance and complicating Washington’s efforts to preserve America’s lead.

www.wsj.com

The direction of US policymakers and Congress are going towards the so-called "decoupling" with PRC. This policy got very strong bipartisan support in Washington. Intel's proposal to increase automotive related production in China is a head-on crash with White House and Congress.

Why Intel even bother to suggest this project?

Basically Intel is saying because automobile industry is so critical to the American interest and currently that industry is struggling to get enough chips, Intel will step up their production in PRC, #1 enemy of USA, to resolve the chips shortage. And making more chips in PRC will reduce US reliance on foreign made chip products.

Isn't that a strange reason, if not a stupid one?

Intel plans include increasing production in many countries. Increasing (or creating) production in PRC does not preclude Intel from doing the same in the US so your suspicions may or may not have any grounds. Intel may be calling US government's bluff in a way here. US policies of China containment and economic growth are inherently conflicting. The high-tech companies stand to lose the most from the containment policy. It's logical that government may need to compensate them for their losses.

 

[count]

Intel plans include increasing production in many countries. Increasing (or creating) production in PRC does not preclude Intel from doing the same in the US so your suspicions may or may not have any grounds. Intel may be calling US government's bluff in a way here. US policies of China containment and economic growth are inherently conflicting. The high-tech companies stand to lose the most from the containment policy. It's logical that government may need to compensate them for their losses.

The problem is Intel justifying its $50b ask if the US government to build foundries in the US by saying “we can’t let China beat us” while also trying to build foundries in China (no doubt with incentives from the Chinese government).

 

[lilo777]

The problem is Intel justifying its $50b ask if the US government to build foundries in the US by saying “we can’t let China beat us” while also trying to build foundries in China (no doubt with incentives from the Chinese government).

There is no contradiction in this Intel approach. The competition between US and China is a government problem, not Intel's. Building foundries in China is just a good business. Besides, the government already mandates that Intel foundries in China use outdated processes so these FABs do not affect the strategic aspects of the competition in any way.

It's not like Intel is asking US government for money to build FABs in China (although the funds are fungible to a degree).

 

[triceratops24]

Intel touts the need to move semiconductor manufacturing away from Asia and yet wants to set up a fab in China. Hypocritical.

The issue is no Chinese company would want to use IFS given the geopolitical situation and its fabs located in the US and Europe. With a China fab, they'd at least have a chance to service Chinese customers.

 

[hist78]

Intel said to put off takeover of GlobalFoundries’ chip plant in China

The Intel deal could have revived one of China’s major foreign-invested semiconductor projects.

www.scmp.com

It seems like Intel's plan was to buy Globalfundries' fab in Chengdu China for the expansion. That building was built but never had a chance to start production.

 

[Daniel Nenni]

It seems like Intel's plan was to buy Globalfundries' fab in Chengdu China for the expansion. That building was built but never had a chance to start production.

I guess it depends on which direction the financial wind blows. Right now the wind is blowing towards the US with Biden's Build Back Better which is another way of saying Make America Great Again?

 

[slin]

Gelsinger is full of contradictions. Just a few months ago he attacked the world depends too much in Asia for chip manufacturing and now he wants to setup a shop in China? Maybe he failed in geography class? Also I get a good laugh at when he says he is an ”engineer”. Just because you’re an engineer does not guarantee you’ll be successful as Intel CEO. Maybe he should say “I’m an engineer and I’m naive”. Waiting to see Intel’s HVM of 20A chips in 2025…

 

[hist78]

Gelsinger is full of contradictions. Just a few months ago he attacked the world depends too much in Asia for chip manufacturing and now he wants to setup a shop in China? Maybe he failed in geography class? Also I get a good laugh at when he says he is an ”engineer”. Just because you’re an engineer does not guarantee you’ll be successful as Intel CEO. Maybe he should say “I’m an engineer and I’m naive”. Waiting to see Intel’s HVM of 20A chips in 2025…

According to a recent interview, Pat Gelsinger is confident that most, if not all, problems will be solved under his new Intel strategy.

 

[Daniel Nenni]

Did you notice that this video is edited? What did they cut out? Did Intel have final edit control over it?

Great interview but I think this is the most important question I would like Pat to answer:

Why are other semiconductor companies experiencing double digit revenue gains during the chip shortage but Intel is not?

 

[slin]

Did you notice that this video is edited? What did they cut out? Did Intel have final edit control over it?

Great interview but I think this is the most important question I would like Pat to answer:

Why are other semiconductor companies experiencing double digit revenue gains during the chip shortage but Intel is not?

View attachment 583

He'll just write it off as his predecessors at Intel made bad decisions over the years and now he has a solid plan to right the ship. He is an engineer you know...

 

[hist78]

Did you notice that this video is edited? What did they cut out? Did Intel have final edit control over it?

Great interview but I think this is the most important question I would like Pat to answer:

Why are other semiconductor companies experiencing double digit revenue gains during the chip shortage but Intel is not?

View attachment 583

Possible causes for Intel's negative revenue growth:

1. A significant amount of customers don't want to buy what Intel can make today.

2. Intel doesn't have the capacity and skills to manufacture those products that customers are looking for, such as high performance GPU, energy efficient processors with superior performance for notebook computers and mobile phones, etc.

3. Intel can't produce enough quantity for those Intel products people really like.

4. Intel's value proposition, such as Price/Performance, is not competitive.

5. Those Intel competitors are just too many and too strong to overcome.

6. Intel suppliers, for whatever reasons, didn't help Intel enough.

7. All of above.