Biden Looks to Intel’s U.S. Investment to Buoy His China Agenda - The New York Times

The president said passage of a China competition bill was needed “for the sake of our economic competitiveness and our national security.”.

Today, we barely produce 10 percent of the computer chips despite being the leader in chip design and research.

But today, 75 percent of the production takes place in East Asia, 90 percent of the most advanced chips are made in Taiwan.

WASHINGTON — In celebrating a $20 billion investment by Intel in a new semiconductor plant in Ohio, President Biden sought on Friday to jump-start a stalled element of his economic and national security agenda: a huge federal investment in manufacturing, research and development in technologies that China is also seeking to dominate.

But he has lost seven critical months since the Senate passed the measure, a sprawling China competition bill that would devote nearly a quarter of a trillion dollars to domestic chip manufacturing, artificial intelligence research, robotics, quantum computing and a range of other technologies.

After months in which he rarely mentioned the China competition bill so that he did not lose focus on other elements of his agenda, Mr.

“Today, we barely produce 10 percent of the computer chips despite being the leader in chip design and research,” he said.

Pervasive shortages of chips, which are needed to power everything from cars and washing machines to medical equipment and electrical grids, have forced some factories to shutter their production lines and knocked a full percentage point off U.S.

While the Biden administration has billed Intel’s new investment near Columbus, Ohio, as a partial remedy for supply chain disruptions that have led to global chip shortages and spurred inflation, the project would do little to resolve any economic problems in the short term.

Speaker Nancy Pelosi indicated on Thursday that House committees would soon turn to negotiations with the Senate to move the China competition legislation toward a vote.

China is not yet a major producer of the world’s most advanced chips, and it does not have the capability to make semiconductors with the smallest circuits — in part because the United States and its allies have blocked it from purchasing lithography equipment needed to make those chips.

But Beijing is pumping vast amounts of government funding into developing the sector, and it is also flexing its military reach over Taiwan, one of the largest manufacturers of advanced chips.

China accounted for 9 percent of global chip sales in 2020, barely trailing the global market share of Japan and the European Union, according to the Semiconductor Industry Association.

At the World Economic Forum this week, Ursula von der Leyen, the president of the European Commission, announced plans for Europe to propose its own legislation early next month to promote the development of the semiconductor industry and to anticipate shortages.

John Neuffer, the chief executive of the Semiconductor Industry Association, said Japan, South Korea, India and other countries were also introducing their own incentives in a bid to attract a strategically important industry.

A dearth of computer chips, for example, forced major automakers to slash production, while even delaying the manufacture of medical devices.

economy to take on China, but its centerpiece is $52 billion in federal investments to encourage chip research, design and manufacturing in the United States.

The global shortage of chips and the pernicious inflation that has accompanied it have spurred more interest in enticing semiconductor manufacturing to the United States.

While the United States accounts for much cutting-edge research and design in the chip industry, it has gone from being the world’s largest producer of semiconductors several decades ago to mostly outsourcing production to Asian factories.

In an effort to ease the chip shortages, the Biden administration has convened gatherings with semiconductor executives, established a global alert system to identify shortages and requested vast amounts of information from chip companies on potential bottlenecks

But analysts say the administration has little control over any short-term trends in the industry, given the long lead times necessary to build semiconductor facilities