Apr 12, 2021 - Technology

Intel CEO calls for "moonshot" to boost U.S. role in chipmaking

Pat Gelsinger

Intel CEO Pat Gelsinger. Photo: Horacio Villalobos - Corbis/Getty Images

Intel CEO Pat Gelsinger called Monday for the U.S. to spend billions of dollars over the next few years as part of a "moonshot" designed to regain lost ground in semiconductor manufacturing. The goal, he said, is to see the U.S. again account for a third of global output, up from about 12% today.

Why it matters: Investments made now will take several years to bear fruit, so they won't do much to ease the current semiconductor shortage, but they're vital to America's long-term economic future and national security, Gelsinger told Axios on Monday.

Driving the news: The White House met with tech leaders in a virtual summit on Monday discussing the need for investment in chip manufacturing.

  • With demand for broad categories of chips exceeding supply, makers of everything from cars to computers and networking gear are having to slow factories and cut output. Automakers have been hit especially hard.
  • At the very leading edge, the vast majority of chip production today is done in Taiwan, an island that remains imperiled by China's long-standing claims.
  • "I would argue the most important building block for our economic livelihood and every aspect of human life is now increasingly not in our control," Gelsinger told Axios in an interview after the White House meeting.

Between the lines: Congress voiced support for investing $50 billion in chipmaking efforts as part of a recent defense spending authorization bill, but it did not actually commit the funds.

  • The global COVID-19 pandemic has accelerated digital shifts in work, education and health care, which Gelsinger said only increases the need for the U.S. to maintain strength in chipmaking.
  • 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.

Yes, but: Although most of what's under discussion will take years to have an impact, Gelsinger does believe that Intel can offer some help with the current chip shortage.

  • Per Reuters, Gelsinger believes Intel's current manufacturing plants could provide some help to carmakers over the next six to nine months if automotive chip designers shifted some production to Intel's plants.

The big picture: Gelsinger, as well as executives from Google and elsewhere, left Monday's White House meeting encouraged by the broad support across parties and branches of government for investment in U.S. semiconductor manufacturing.

  • "We commend President Biden’s support for $50 billion in semiconductor manufacturing and research investments," Semiconductor Industry Association CEO John Neuffer said in a statement. "Funding the chip manufacturing incentives and research investments called for in the CHIPS for America Act, as President Biden’s infrastructure plan would do, will strengthen U.S. semiconductor production and innovation across the board so all sectors of our economy have the chips they need."
  • Google CEO Sundar Pichai called it an "excellent" meeting." We appreciate the Biden Administration’s focus on the importance of semiconductor supply to innovation across industries," Pichai said in a statement.
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