Intel CEO calls for moonshot to boost US chip production

Posted on Tuesday, Apr 13 2021 @ 09:35 CEST by Thomas De Maesschalck
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Fresh Intel CEO Pat Gelsinger is really banging the drums about boosting US chip production. During a White House meeting with tech leaders, Gelsinger called for a "moonshot" effort to regain lost ground in semiconductor manufacturing. Over the past couple of decades, the US has lost a lot of marketshare in the semiconductor chip manufacturing market to East-Asian countries. Gelsinger is urging politicians to spend billions of dollars to rebuild this industry -- and to make the US again account for a third of global output, up from around 12 percent today:
Gelsinger, who returned to Intel two months ago as its CEO, has been pushing a similar manufacturing focus at the company itself. While the previous leadership was set to increase reliance on outside manufacturing amid production woes, Gelsinger has launched an expensive and ambitious effort to bring Intel back to industry leadership producing chips for both itself and other companies.
It seems Gelsinger hopes government will free up billions of dollars to help Intel (and others) to manufacture chips more competitively in the US. US Congress has voiced support for investing $50 billion in chipmaking efforts.

One of the primary drivers here is the realisation that reliance on Taiwan poses a big national security risk. Almost all cutting-edge semiconductor foundry capacity is located on the island -- as well as the lion's share of mature process node capacity.

Intel in talks to make automotive chips

One industry that's hit really hard by the current chip shortages is the automotive industry. Last year the car market got hit hard by the COVID-19 pandemic and now with demand on the rise again, car makers have trouble getting enough chips. This has already resulted in temporary shutdowns of some car plants.

Intel is now trying to step in by pitching its new semiconductor foundry to the automotive industry. Last decade, Intel failed to turn its foundry business into a success, but the firm's new CEO has re-launched this business unit and is going further than Brian Krzanich by making Intel's production capacity more flexible.

Reuters writes Intel hopes to lure one or more automotive chip designers. Of course, these companies can't switch immediately to Intel so it's not a fast solution. Qualifying chips from a new supplier takes months, and Intel hopes it can start production within six to nine months:
But Gelsinger said Monday that he told White House officials during the meeting that Intel will open its existing factory network to auto chip companies to provide more immediate help with a shortage that has disrupted assembly lines at Ford Motor Co and General Motors Co .

“We’re hoping that some of these things can be alleviated, not requiring a three- or four-year factory build, but maybe six months of new products being certified on some of our existing processes,” Gelsinger said. “We’ve begun those engagements already with some of the key components suppliers.”
Gelsinger didn't go into details but said chip production for third parties could take place at Intel's plans in Oregon, Arizona, New Mexico, Israel, or Ireland.

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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