Wall Street has soured on Intel in recent years, turning its attention to flashy new semiconductor upstarts instead. Now that Intel is the beneficiary of goodwill in Washington and a cold war in Asia, investors are scurrying back. On Tuesday, the US microprocessor legend announced an ambitious plan to expand its global chips business. Intel will spend $20bn to build two additional fabrication plants in Arizona. It also plans to build a “foundry” unit that will manufacture chips for third party, “fabless” designers. 

Intel’s waning manufacturing prowess has led at least one investor to suggest it get out of making its own chips. Recently appointed chief executive Pat Gelsinger is making the opposite bet. It is made easier by the US president’s tacit backing. Semiconductors have become a proxy battle between the US and China. Joe Biden has made domestic capabilities a key priority.

According to data shared by Intel, nearly half of global chip sales occur in the US, though American production is only about a tenth of the total. That proportion has dropped with the rise of Taiwan Semiconductor Manufacturing Company and other manufacturers in Asia. Tension with China means Washington is willing to spend taxpayer money to ensure vital supply chains remain in the US.