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Gina Raimondo, the US Secretary of Commerce, spoke at an Intel event today and compared the US government’s current focus on revitalizing its chip industry to the space race of the 1960s. “The fact that we are so dependent on a few countries in Asia that we need every piece of life-saving medical equipment, cars, technology, showed us that we have to work again to make more chips. Have to,” said Raimondo.
Full disclosure
Intel’s new foundry strategy will involve breaking out the new unit’s financials so investors can see how that part of the business is doing. “We’re not fixing one company. We’re building two dynamic new organizations,” Gelsinger said.
An Intel factory employee holds a wafer with 3D-stacked Phovaros technology at an Intel fab in Hillsboro, Oregon.Photo: Intel Corporation
All Intel needs now is more customers willing to trust it with the future of their business. Some chip industry insiders say the company’s plans for a revamped foundry look more likely to succeed than previous attempts to revive Intel’s fortunes.
“He didn’t really understand the foundry market before joining Pat,” says Dan Hutchison, a longtime chip industry analyst with Tech Insights. “It’s steadily improved. The messaging is very focused, and they’re picking up customers, which proves they’re doing something right.”
Gelsinger took over as Intel’s CEO in 2021 and went on a downward spiral with the company after several high-profile missteps. It promised an aggressive turnaround plan that would include developing more competitive chips on its own while recapturing engineering excellence in manufacturing and offering it to other firms.
Hutchison says the company’s biggest edge may be that it can offer advanced packaging of the newly mapped chips in functional components, guaranteed supply lines, and other sub-chipmaking solutions that customers can’t afford. Consider safer in a certain world. “Their biggest point of differentiation is that they are a strategic alternative to TSMC,” he says.
Intel’s decline, due to the importance of computer chips and the extraordinary potential of AI, has raised concerns among the US National Security Agency. China’s technology ambitions and the potentially vulnerable location of most of TSMC’s factories in Taiwan have raised concerns that America’s access to the world’s best chips could be cut off. In 2022, the US Govt Passed the CHIPS Act. A $52 billion pledge to revive domestic chipmaking and secure silicon supply lines. According to Bloomberg reportsIntel is in line to receive $10 billion of that amount.
Intel apparently believes it can use even more government cash. On stage today, Gelsinger asked Secretary Raymond whether the US government might need another CHIPs Act. “I suspect that if we’re going to lead the world there’s going to have to be—whether you call it CHIPS to or something else—continuing investment,” Raimondo said.
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