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The US puts an end to any plans Intel may have to make more chips in China


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The US is banning some major US chipmaking companies from building "advanced technology facilities'' in China, the Biden administration has announced.

The ban will apply to any company that receives funding as a part of the CHIPS and Science Act, which was approved by the US Congress in August, and will last for 10 years. This act aims to increase domestic manufacturing of semiconductors with an influx of $50B across companies that apply. More than half of those funds are headed to cutting-edge facilities for today's top chips, though a smaller amount will help to ease demand for older chips and into research. 

Generally, it's about shifting what is currently a very Asia-focused manufacturing hub slightly more westward. Though banning any company from exploring options in China is certainly one other way of going about that.

One major company known to PC gamers everywhere and set to take a large sum of cash from the CHIPS Act is Intel. The company's CEO Pat Gelsinger was fiercely campaigning for the act and Intel is set to be one of the largest beneficiaries of it, considering the company's massive domestic and international chip manufacturing facilities. One of which is in Dalian, China, in fact, known as Fab 68.

Though only one of many fabs owned and operated by Intel globally, Fab 68 was very recently in line for a significant expansion—a move reportedly discouraged by the White House. Now it seems the White House may have found an even stronger way to keep Intel's investment out of China, with this recent proviso for receiving CHIPS Act funds effectively putting an end to that plan or anything like it.

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Memory manufacturer Micron may also have to side-line any further plans in China if it hopes to net a lump sum from the US government. It runs an assembly and test facility in Xi'an China, first opened in 2007. Though the US government has specified that any facility building older chips can be operated in the area to serve the local region.

Both Intel and Micron have announced plans to expand their US-based operations, however, and Intel is also building and expanding in the EU.

This ban won't necessarily affect companies such as Nvidia or AMD directly, as they rely on third parties to build their chips for them. However, neither has managed to dodge the eye of the US government entirely: both has been told to stop sending high-end datacentre GPUs to China and Russia.

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