Intel CEO hopes U.S. can reclaim one-third of chip manufacturing

ANASTASIA ZYG


Pat Gelsinger, CEO of Intel, speaks in Santa Monica, Calif., on March 9, 2017, in a photo taken when he was CEO of VMware.

Patrick T. Fallon | Bloomberg | Getty Images

Intel CEO Pat Gelsinger said on Monday that he hopes that U.S companies will manufacture a third of semiconductor microchips in the U.S., up from about 12% today.

“I believe our moonshot should be that a third of the supply of semiconductors should be back on American soil by American companies,” Gelsinger said on CNBC on Monday.

Gelsinger was speaking ahead of a virtual meeting on Monday held by the White House to discuss the global semiconductor shortage, which has snarled industries from automotive manufacturing to electronics.

The summit comes as the Biden administration has brought attention to the location of the global semiconductor supply chain. The top factories that manufacture chips are based in Taiwan and Korea, and U.S. government officials have been pushing to increase manufacturing on U.S. soil for industries like defense, as well as to hedge against possible geopolitical events that could cut off U.S. chip supplies.

Earlier this year, Intel announced that it would invest $20 billion in new semiconductor factories, called fabs, in Arizona. It also said that it planned to become a foundry, or a company that manufactures other companies’ chips for them.

Companies participating in Monday’s summit include Google-parent Alphabet, Ford and AT&T, in addition to Intel.

Also participating in the summit are Taiwan’s TSMC and South Korea’s Samsung, which are the two biggest foundry firms and control more than 70% of the foundry market. TSMC makes chips for companies like Apple and Amazon, and has a 54% share of the foundry market, according a Trendforce estimate.

On Monday, Gelsinger emphasized that while manufacturing on U.S. soil was important, he also believes that U.S. companies should own the intellectual property that makes advanced microchip manufacturing possible. “We want to have the R&D, the research, the ownership of the technology, not just the manufacturing by American companies on American soil,” Gelsinger said.

“It isn’t just manufacturing, it’s control and influence on the total control and technologies that go behind it,” Gelsinger said.

The Biden administration has backed $50 billion in funds for the American semiconductor industry through its $2 trillion infrastructure proposal. In Feburary, the Biden administration also ordered a review of U.S. supply chains for several core products, including semiconductors. The 2021 defense bill included the Chips Act, which called for federal incentives for semiconductor manufacturing, but did not include funding.



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