‘Implausible’ That EU Now Leads US on Chips Act Funding: Intel CEO

Intel “lost its way” as a U.S. semiconductor powerhouse because it suffered under the “non-technical leadership of the most important technology company in America for a decade and a half,” CEO Pat Gelsinger told a Washington Post webinar Tuesday.

The “confluence” of bad decisions by previous Intel management and the board, plus numerous Intel technology mishaps, took “one of the great technology icons of America, and we’re not leading anymore,” he said. “Part of my coming in was to turn the company around.” Gelsinger left Intel as chief technology officer in 2009 after a 30-year career there, rejoining as CEO in 2021 after senior executive roles at EMC and VMware.

The $52 billion Chips Act incentive package embedded in both the U.S. Innovation and Competition Act and America Competes Act now before House and Senate conferees “has become a bit of a political football,” said Gelsinger. “We’ve made it super-clear” to the House and Senate leadership that if the Chips Act funding is not approved, “I will change my plans” to invest $20 billion in Ohio to build two Intel semiconductor fabs on a 1,000-acre campus just east of Columbus (see 2201210041), said the CEO.

The Europeans "have moved forward very aggressively” on a package of incentives for the semiconductor industry that's in "the final stages of approval," said Gelsinger. “I think it’s embarrassing that the U.S. started this process a full year before the Europeans, and the complex, 27-member-state Europeans have moved forward more rapidly. It’s just implausible.”

Intel is emphasizing to House and Senate leaders that "there are real-time consequences" if the Chips Act funding "doesn't pass," said Gelsinger. "I will make the decision to delay our project in Ohio. We're going to go ahead in Ohio, but the speed and the size is dependent on U.S. industrial policy to make this happen, and that's embodied in the Chips Act."

In talks with fellow semiconductor CEOs, Gelsinger learned "at least three other fabs" in the U.S. are "dependent" on the Chips Act "getting across the line," he said. The industry's message to Congress, he said: "Do we want five fabs built in the U.S., getting underway this year, or do we want everything being pushed out to either Europe or Asia and getting further delayed?"

The industry is emphasizing "that this must pass right now," said Gelsinger. "It has meaningful consequences economically. We're also bringing in our national security allies very aggressively." The industry also is willing to "negotiate" with House and Senate conferees to create a "skinny bill" that has fewer "issues" attached to it and can still draw "good bipartisan and bicameral support," he said. "We are telling everyone in our congressional conversations, do not leave for August recess without this being done."

Gelsinger is confident the industry can rebuild the talent pool necessary to support reshoring U.S. chip production and R&D, he said. Since Intel announced the Ohio project, “the outpouring of interest” from top U.S. engineering schools showed “they are excited to build the semiconductor manufacturing curriculum to build us that long-term workforce,” he said. “Clearly, that’s a priority. We’ve committed funding to that.”

The U.S. also needs to revise its high-skilled immigration policies to build a domestic semiconductor talent pool, said Gelsinger. “Anybody who receives a master’s or a Ph.D. from a U.S. school should get a green card stapled to it,” he said. “We want the best talent in the world coming here, staying here.”