The Intel Corporation (INTL  ) has received "strong discouragement" from the White House to carry through on plans to invest in a China-based factory for chip production.

Intel's original plans were to convert an existing factory in Chengdu, China, in the hopes of having production up and running by 2022. As Intel's ambitions to increase production are heavily dependent on federal funding, the opinion of the Biden Administration carries considerable weight. According to anonymous sources who spoke to Bloomberg, the White House wasn't very enthused by the idea.

While President Joe Biden and former President Donald Trump couldn't be any more different, they seem to share the perception of China as an encroaching threat to national security. Within the first year of his tenure, President Biden expanded policies first enacted by President Trump, such as further restrictions on the use of Chinese telecom technology by the Federal Government. The Biden administration has also overseen the revision of FCC guidelines, preventing Chinese firms from obtaining licenses.

The soft denial isn't the end of the road for Intel, which is hoping to carve out a more significant chunk of the chip market for itself. President Biden's efforts to return silicon wafer manufacturing to the continental United States are stalled while the CHIPS For America Act lingers in congressional limbo. The Senate greenlit the bill in June, which now requires the approval of the House of Representatives.

As part of the CHIPS act, $52 billion in federal funding would be committed to research, factory construction, and manufacturing startup costs to jumpstart U.S. wafer production. Likely anticipating the eventual release of these funds, Intel has said that it will turn its attention away from China.

Intel investors don't appear to have reacted much to the announcement. Shares slid just slightly on Monday, losing 0.38% by the day's close. Intel seems to be off to a bit of a better start on Tuesday, gaining 0.95% by noon.