Intel Corporation’s chief executive officer Mr. Patrick Gelsinger made an appearance at the World Economic Forum held in Davos, Switzerland, this week. The conference was the first time the event was held in person since the coronavirus pandemic, and Mr. Gelsinger’s interview with CNN’s Julia Chatterley covered a wide variety of topics ranging from the multi-billion dollar U.S. CHIPS Act to the vulnerability of the global semiconductor supply chain to geopolitical tensions.
Intel Chief Asserts That Chips Are Now More Important Than Oil
The conversation started with Chatterley asking the Intel chief about the need to balance the short-term cost cutting decisions (read: layoffs) with the long-term strategic decision-making crucial for regaining semiconductor process node leadership and expanding product. Mr. Gelsinger replied by commenting on the tricky balancing act and the need to prevent short-term economic cycles from dominating long-term decisions. According to him: The CNN anchor then asked him if he would have cut down more costs if there was no talk of government funding. Mr. Gelsinger replied that the measures are part of Intel’s transformation, and the weak environment has accelerated the difficult decisions. So, we’re, as I said in my last earnings call, it’s hitting the brakes and hitting the gas at the same time. And you know doing that in this tough economic cycle, you know it’s a challenge to be a CEO these days. And obviously, as you said, some help from your known governments, we believe strongly in the public-private partnership benefits of the U.S. CHIPS Act. And we haven’t quite seen the money yet [LAUGHS]. Cause it’s now in Commerce’s hands to do the final rulemaking for us to apply against those grants. We expect we’ll see them this year, but hey, I’m investing, please show up with the money! Because we’re assuming that those help us make these massive investments. The executive outlined that: The conversation then shifted to the recent localization of global semiconductor supply chains, where countries focus on moving chip production inside their borders. The Intel executive favors these changes, as he believes they will balance the chip manufacturing industry and promote competitiveness. He elaborated: The proximity of Taiwan with China, the fact that the Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest contract chip manufacturer and the bulk of its chipmaking plants are located in Taiwan and the tensions between China and Taiwan are a hot topic in the industry right now. Mr. Gelsinger has previously stated that these call for more subsidies in America, and when asked by Chatterley on his recent comments saying Taiwan’s role in global technology was “precarious,” the executive explained: Finally, the conversation concluded with the CEO stating that chips really are more important than oil these days, when he commented on the need for communication and its importance for Intel’s role as a global company. According to Mr. Gelsinger:
