Intel CEO Pat Gelsinger stated that the COVID-19 pandemic was a significant catalyst for Intel's decision to refocus on its manufacturing capabilities. He emphasized that the US and European nations had overlooked the semiconductor industry, allowing Taiwan and Korea to become dominant players through long-term industrial policies and investment in attracting the industry. Gelsinger noted that TSMC and Samsung, based in Taiwan and Korea respectively, are Intel's main competitors in the semiconductor market.
He attributed the West's failure to focus on high-margin aspects of the industry, such as chip design, while offshoring low-margin manufacturing. Gelsinger expressed gratitude for Intel's timely initiative to reclaim its manufacturing capacity and suggested that starting the process a year later may have made it impossible. This initiative came after former CEO Bob Swan faced pressure to transition production to outsourced foundries due to Intel's delayed 7nm manufacturing process.
Gelsinger also highlighted the impact of the COVID-19 pandemic and subsequent supply chain disruptions, leading to a global realization of the critical nature of balanced and resilient supply chains. He referred to the US and EU CHIPS Acts as a response to the need for secure semiconductor supply chains and outlined Intel's plans to establish fabrication plants in various locations, seeking funding and tax incentives from the Acts.
Intel aims to secure significant funding from the US and EU CHIPS Acts, acknowledging that semiconductor manufacturing requires substantial investment. Despite the large sums involved, Gelsinger indicated that the funding would not cover the full costs of developing the planned fabrication plants, necessitating potential future rounds of funding.
Gelsinger outlined the immense financial requirements for cutting-edge semiconductor manufacturing and identified TSMC, Samsung, and Intel as the only companies capable of producing such chips due to their substantial investments.
Addressing China's position in the semiconductor market, Gelsinger expressed confidence in Intel's ability to compete with TSMC and Samsung, noting that China currently lags behind in leading-edge process technology by approximately a decade. He attributed this delay to export policies by certain nations and opined that China may disrupt the market for mature nodes but is significantly behind in leading-edge technology.
Ultimately, Gelsinger's statements shed light on Intel's strategic realignment towards manufacturing, the industry's global dynamics, and the critical role of government policies and funding in fostering semiconductor innovation and growth.
