Intel should beware of becoming a national champion

DATA MAY be the new oil, but it is semiconductors—the brains of the data economy—that these days vie with hydrocarbons as the business world’s biggest economic flashpoint. Like crude, the $500bn computer-chip industry is essential to industrial economies. It is regularly buffeted, as are oilmen, by excesses of supply and demand. And it is at the vortex of intense geopolitical rivalries. Its main wellspring, though, is not in the Persian Gulf, but on an island about 175km (110 miles) across the water from China. What is more, the Communist Party in Beijing claims the island in question, Taiwan, as part of its territory. That puts the semiconductor industry at the heart of the Sino-American power struggle—a uniquely uncomfortable place to be. It is in this context that the recent $20bn commitment by Intel, America’s biggest chipmaker, to revitalise semiconductor production in America should be seen. With some fanfare, its new boss, Pat Gelsinger, is placing a flag on his home turf, hoping to help reclaim the dynamism that the country which invented semiconductors has lost to chip factories in Taiwan and South Korea. It comes amid a surge of “chip nationalism”, in which governments from East to West are offering lavish subsidies for such “fabs”. It coincides with a severe chip shortage that—though it mostly affects microprocessors used in cars, which Intel does not sell—has brought home the danger of supply disruptions. And it follows America’s kneecapping of Huawei, a Chinese maker of networking gear, by restricting its access to American technology, including semiconductors.