Gelsinger: Intel should get more CHIPS Act funding than rivals
- Reference: 1692118987
- News link: https://www.theregister.co.uk/2023/08/15/gelsinger_intel_subsidies/
- Source link:
Gelsinger made the remarks at the Aspen Security Forum in Colorado in July, while taking part in a discussion on the theme of semiconductors and national security. A video of the session is online [1]here .
The boss of the chipmaker was commending the progress so far with the CHIPS Act, although pointing out that wheels were only just starting to be set in motion.
[2]
"It's just getting underway, and it's both subsidizing of manufacturing to make us competitive with Asia – it's 30 to 40 percent more expensive to do that in the US – so the CHIPS Act sort of levels the playing field to make our investments in this space competitive in the worldwide sense," Gelsinger said. "And funding also covers medium term investments in industry formations, supply chain rebuilding in the US, and also long term research."
[3]
[4]
But when asked by the host whether Intel cared about foreign semiconductor manufacturers also being able to get CHIPS Act funding to build factories on American soil, Gelsinger had this to say: "I believe if Samsung and TSMC and others are building in the US, we should be happy about that – I just want more."
He clarified that remark by adding "Because all of my essential R&D is done here, most of their R&D is done overseas, so I believe we should benefit more."
[5]
"But I do believe that if I migrate their manufacturing here as well, that's good for the US, it's good if the R&D and the manufacturing are done here, and I believe the CHIPS Act is designed to encourage that whole range of capabilities," he explained.
This conveniently overlooks the fact that Intel also has R&D facilities in other countries, of course, and the chipmaker's [6]own website boasts that: "Israel is home to the largest development center of Intel in the world and our contribution to Intel's global technology development is significant. For example, the 7th and 8th Generation Intel Core processors were developed mainly in Israel."
Intel is also set to be the recipient of subsidies from Europe in order to build chip plants there, [7]particularly in Germany . We look forward to Gelsinger's declaration that his company should get less funding from the [8]European Chips Act than others because its R&D is done elsewhere.
[9]
Gelsinger said Intel had a "very audacious plan" to catch up to TSMC by 2025, at which point "we believe we are building the best transistors again and the best semiconductors in the world." He added: "we are rapidly expanding our manufacturing so that the statement about them building the majority of leading edge chips [will be] no longer true."
But the world is acutely dependent on Taiwan for semiconductor production right now, which is which is why the CHIPS Act and its investments are so critical, according to Intel's CEO, as "we need to move quickly to create more balance."
"This actually began 30 years ago. The US and EU were about 80 percent of worldwide manufacturing and Asia 20 percent. And all the leadership stuff happened here. Now, we're 20 percent here and 80 percent in Asia, and continuing to decline," he said.
However, when it came to China and Washington's efforts to contain China's own plans for expanding its semiconductor industry and technical expertise, Gelsinger neatly illustrated the US dichotomy about wanting to eat your cake and still have it.
It was put to Gelsinger that the Biden administration was exasperated by tech companies like Intel now telling it to row back on its export restrictions on technology sold to China.
[10]Meltdown avoided: Intel rediscovers profitability
[11]Get 'em while you can: Intel begins purging NUCs from inventory
[12]Chips ahoy! US and China locked in self-destructive battle of trade restrictions
[13]Intel's $2.8B Q1 loss and 36 percent revenue slide were slightly less horrible than expected
"Right now, China represents 25 to 30 percent of semiconductor exports," Gelsinger responded. "If I have 25 or 30 percent less market, I need to build less factories, right? We believe we want to maximize our exports to the world, we want to maximize selling fish, not fishing rods, across the world, including China."
"You can't walk away from 25 to 30 percent and the fastest growing market in the world and expect that you can remain funding the R&D and the manufacturing cycle that we've released. We want to maximize and right now semiconductors are the number two export to China behind the strategic category of soybeans, and there's not even a close number three," Gelsinger claimed.
Sadly, for Intel, selling high-value goods to other markets is almost certain to end in your target markets working out how to produce them for themselves, as the British textile industry discovered. ®
Get our [14]Tech Resources
[1] https://www.youtube.com/watch?v=grp93s6QVOg
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZNv1i9jH2hWds0bXTWePHAAAAYc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZNv1i9jH2hWds0bXTWePHAAAAYc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZNv1i9jH2hWds0bXTWePHAAAAYc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZNv1i9jH2hWds0bXTWePHAAAAYc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.intel.com/content/www/us/en/corporate-responsibility/intel-in-israel.html
[7] https://www.theregister.com/2023/06/19/germany_to_subsidize_intel_10bn/
[8] https://www.theregister.com/2023/04/19/eu_chips_bill/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZNv1i9jH2hWds0bXTWePHAAAAYc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2023/07/28/intel_q2_results/
[11] https://www.theregister.com/2023/08/14/intel_nuc_purge/
[12] https://www.theregister.com/2023/07/17/us_china_chip_wars/
[13] https://www.theregister.com/2023/04/28/intel_28b_loss/
[14] https://whitepapers.theregister.com/
They may not sell the fishing *rods*, but I’m willing to bet thry sell the tacklebox, and some of the fish may still have some hooks in them, at the risk of beating this metaphore to pulp.
They are claiming they will get on par with TSMC in terms of the manufacturing process they use. If they execute on their roadmap they will do that.
Getting on par with TSMC in terms of foundry market share is another matter entirely - it would take until beyond the end of the decade minimum even if they do everything right.
C-suite metaphores...
where would we be without them? Happier? probably not; mainly feeling less superior to the dolts that 10^6 X our salaries.....
Light a fire for a man; he will be warm for an hour.
Set a man on fire; he will be warm for the rest of his life.
May be but...
When Intel was at the top of the world, Intel had huge R&D and core development teams in USA. CA and OR topped processor design and development, while AZ and OR manufacturing & assembly sites cranked out chip$ like no other. Of course, there were many other functions all over the country and the world but "core expertise' was right here in USA.
The question is, are the core functions still in USA or have been shipped overseas? If overseas, what's the plan to bring them back?
Globalization drove huge market opportunities. Worldwide expansion was inevitable. True international expansion means adding more capability to supplement domestic capability to meet increased demand. But too many of our companies "expanded" overseas by shrinking here, both in headcount and manufacturing, In the extreme cases, even core functions moved overseas.
And now we are where we are. Trying to reverse past mistakes with essentially subsidies.
Pat G's return was the best thing that happened to Intel in a long time. Best wishes.
Intel has an audicious plan to get on a par with TSMC by 2025? Well, that's one way of saying "high risk, low probability of success".
Also the selling fish not fishing rods thing. Intel may see it as selling fish, clearly some in the US Gov see a dual use for fish that they're not keen on China being able to benefit from.