‘China’s doing everything it can to take over the global market’: Biden’s computer chip warning

Washington: Intel says it will invest more than $20 billion in two new chip-making plants in the United States, as it looks to boost its production capacity amid a global shortage of semiconductors that are used in everything from smartphones to cars.

US President Joe Biden used Intel’s announcement in Ohio on Friday to push a $US52 billion ($72.3b) bill awaiting House approval that would invest in the chip sector and help ensure more production occurs in the US.

Intel CEO Patrick Gelsinger, left, listens as President Joe Biden speaks about Intel’s announcement to invest in an Ohio chip making facility on the White House Campus in Washington. Credit: AP

“China is doing everything it can to take over the global market so they can try to outcompete the rest of us and have a lot of applications including military applications,” Biden said at the White House.

“We are going to invest in America,” he said. “We’re investing in American workers. We’re going to stamp everything we can, ‘Made in America,’ especially these computer chips.”

He laid out case for how supply disruptions of computer chips combined with a growing economy have driven inflation higher.

Having more capacity for US manufacturing will help ease those pressures, Biden suggested.

A rendering shows early plans for two new Intel processor factories in Licking County, Ohio. Credit: AP

The announcement of the new plant is part of Chief Executive Officer Pat Gelsinger’s strategy to restore Intel’s dominance in chip making and reduce America’s reliance on Asian manufacturing hubs, which have a vice-like grip on the market.

“These factories will create a new epicentre for advanced chipmaking in the US that will bolster Intel’s domestic lab-to-fab pipeline,” Gelsinger said in a statement.

While chipmakers are scrambling to boost output, Intel’s plans for new factories will not alleviate the current supply crunch because such complexes take years to build. Gelsinger previously said he expected the chip shortages to last into 2023.

To dramatically increase chip production in the United States, the Biden administration is making a big push to convince Congress to approve $US52 billion in funding.

“This project is a crucial step in growing America’s domestic chip manufacturing capacity,” Deputy Secretary of Commerce Don Graves said in a separate statement, referring to Intel’s announcement. Gelsinger will meet with Biden at the White House later on Friday, Intel said.

Intel lost out to Samsung Electronics as a top semiconductor vendor in 2021 and it dropped to the second spot with 0.5 per cent growth last year, delivering the lowest growth rate among the top 25 vendors, data from Gartner showed.

As part of its turnaround plan to become a major manufacturer of chips for outside customers, Intel broke ground on two factories in Arizona in September. The $US20 billion plants will bring the total number of Intel factories at its campus in the Phoenix suburb of Chandler to six.

The planned investment in Ohio in what could be an eight-factory complex will cost tens of billions of dollars and create 3000 permanent jobs and 7000 construction jobs on the 1000-acre site in Licking County, just outside of Columbus.

Intel’s new investment is expected to attract partners and semiconductor equipment and materials suppliers.

Air Products, Applied Materials, LAM Research and Ultra Clean Technology have shown interest in establishing a presence in the region, Intel said.

Planning for the first two factories will start immediately, with construction expected to begin late in 2022 and production starting in 2025.

Reuters

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