Intel CEO Voices Concerns About CHIPS Funds, Export Controls

— Part of this EE Times series: A Vulnerable U.S. Electronics Supply Chain Other articles in the series include: Reshoring Chip Industry Risks Failure With Just More Fabs ; Experts: U.S. Military Chip Supply Is Dangerously Low ; U.S. Crawls Toward Rebuilding Frail PCB Industry ; USA Rare Earth Aims to Break China’s Grip ; GF, Lockheed Martin Pair Up to Improve National Security ; 3 Governments Investing in New Fabs Pledge Cooperation ; PCB Association Presses Washington for Lifeline ; Chip Experts See Talent Shortage as Main Growth Hurdle and Former U.S. Officials Urge New Export Alliance on China . Intel CEO Pat Gelsinger is lobbying for a large portion of the $52 billion that the U.S. will provide in subsidies for new fab construction—and urging the U.S. to ease up on export controls that are throttling sales to China, the world’s largest semiconductor market. Were he to not succeed in these efforts, it would amount to a “major double whammy” against Intel, an analyst told EE Times. And, another analyst asserted, the export controls unfairly zero in on Intel and other chipmakers. Partner Content View All By SK hynix 07.25.2023 By Michael White, David Abercrombie, and John Ferguson 07.18.2023 “China represents 25% to 30% of [Intel’s] semiconductor exports,” Gelsinger said at the Aspen Security Forum last month. “If I have 25% or 30% less market, I need to build less factories. You can’t walk away from 25% to 30% and the fastest-growing market in the world and expect that you remain funding the R&D and the manufacturing cycle.” His comments put on the negotiation table the $30 billion that Intel plans to invest in new facilities in Ohio, as well as other U.S. projects. U.S. jobs, the economy and even national security are at stake in the competition for chip dominance with China. Albright Stonebridge Group’s Paul Triolo Intel walks a fine line with the U.S. government, said Paul Triolo, who advises global tech companies at Albright Stonebridge Group. The firm doesn’t include Intel as a client. “On one hand, they [Intel] are being asked to invest billions in advanced fab construction in the U.S. to onshore manufacturing, investing at least $30 billion before they generate any revenue in the U.S. from these new facilities,” he said. “On the other, the U.S. Department of Commerce is prepared to slap further controls on Intel’s ability to ship commodity semiconductors to China that could significantly cut into its already-reduced revenue from the China market—in essence, a major double whammy.” Intel wants more than foreign rivals Gelsinger argues that Intel deserves more U.S. CHIPS Act money than foreign rivals like Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung, which are also bidding for the subsidies to be awarded this year. “Since the Act was underway, five major projects have been announced—my Arizona project, my Ohio project , TSMC in Arizona , Samsung in Texas and Micron in New York —plus multiple small projects,” Gelsinger said. “I just saw [U.S. Department of Commerce Secretary] Gina Raimondo on Monday [July 24].” Commerce wields a carrot and a stick, as it will disburse CHIPS Act subsidies later this year while also deciding export controls that have hurt the sales of Intel, TSMC and Samsung, which all rely heavily on China for revenue while also competing for U.S. subsidy money. “If Samsung and TSMC and others are building in the U.S., we should be happy about that,” Gelsinger said. “All of my essential R&D is done here. Most of their work is done overseas. We [Intel] should benefit more.” TSMC committed to Taiwan TSMC on July 28 said it is building a new R&D center in Taiwan that will keep the world’s most advanced semiconductor technology on the island. For decades, TSMC and the Taiwanese government have cooperated to make the island an indispensable chip supplier to the world. Intel and Samsung for years have been trying to catch up with TSMC in process technology. TSMC CEO C.C. Wei said at the event that the company aims to “keep its roots” in Taiwan. The R&D center will develop 2-nm technology and conduct research into new materials and transistor structures. “It’s been called the Silicon Shield,” Gelsinger said of Taiwan’s strategy to fend off a potential attack by China, which considers Taiwan a breakaway province. Taiwan’s security is a conundrum for the U.S. “We have a massive national security vulnerability because of our dependence on Asia,” Raimondo said at a separate event held by the American […]

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