Gelsinger emphasized that only one Western company out of three on “the planet” can manufacture advanced semiconductors, and that “restructuring the world's Western supply chain” will pay dividends in the coming years. He added that it could give rise to
“We expect to break even with this business by 2027, and then be on track to become profitable after that,” he said of the company's plans.
“Part of the problem is that we have to significantly overinvest to get back to competitiveness” against Asian rivals, Gelsinger said.
Intel reveals $7 billion operating loss for chip manufacturing division
Intel reveals $7 billion operating loss for chip manufacturing division
U.S. President Joe Biden said last month that Intel would receive $19.5 billion in federal aid to build and modernize semiconductor factories in Arizona, New Mexico, Oregon and Ohio.
The U.S. government views America's dependence on foreign semiconductors and China's growing military and global influence as national security threats. The revitalization of Intel's chip manufacturing business is linked to maintaining the United States' global technological lead.
Gelsinger, who previously spent 30 years in engineering and leadership roles at Intel, returned to the company as chief executive officer in 2021 with a return plan that includes rebranding the company's chip manufacturing business. His goal was to catch up with Taiwan Semiconductor Manufacturing Company (TSMC), a major chipmaker whose customers include Apple and Google.
He said Thursday that 30 years of clear industrial policies by Taiwan, South Korea, Japan and mainland China have attracted and integrated the semiconductor manufacturing industry to Asia.
He said incentives at the Asian chip hub include tax breaks, land grants, R&D credits, university programs and a rival to Taipei-based Intel that Gelsinger described as “the technology center of the world.” He said this includes government incentives for companies to invest in TSMC.
He added that if more than half of the world's chips are manufactured in one region, “just 100 kilometers from mainland China,” that “is not a sustainable situation for the world.”
Founded in the late 1960s, Intel (one of the original Silicon Valley companies) was initially one of the world's leading chip manufacturers. In the 1990s, nearly 40 percent of the world's semiconductors were produced in the United States.
TSMC resumes operations after earthquake, reassured that chip supply will not be interrupted
TSMC resumes operations after earthquake, reassured that chip supply will not be interrupted
Intel's dominance ended by the mid-2010s due to rising costs and fierce competition from overseas.
Currently, U.S. manufacturers make less than 10% of the world's chips, and none of them are cutting edge. About 80% of chip production takes place in Asia, and the most advanced chips are manufactured exclusively by his company TSMC.
Gelsinger said Intel aims to have the latest chip manufacturing technology in place by 2025, but thanks to export restrictions imposed by the U.S. government on China, the Asian powerhouse will soon be able to make up the difference. He said it cannot be filled.
He added that as the gap widens over time, demand for China's high-tech chips will increase, allowing Western companies to focus on the Chinese market, which accounts for about 25% of the global semiconductor market. .
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Magnitude 7.2 earthquake kills 9 people, injures over 1,000 in Taiwan as rescue efforts continue
Magnitude 7.2 earthquake kills 9 people, injures over 1,000 in Taiwan as rescue efforts continue
But Gelsinger said that because of “legitimate national security reasons,” the United States and its “global allies” are aligned and are pushing China “very hard about what technology we can export.” He warned that it would be necessary to think carefully.
“Especially in the semiconductor industry, that means Europe and Japan. Almost all semiconductor technology comes from the U.S., Europe and Japan, and whether there is alignment on export policy and how we view the rest of the world is the key to the world.” technology,” he said.
