Intel CEO Pat Gelsinger’s ‘No-Brainer’ Plan To Solve Chip Shortage

‘There’s certain aspects of this that I would say is a no-brainer. It underlines every industry, American competitiveness -- this is so straightforward,’ says Intel’s CEO Pat Gelsinger.

Intel’s new CEO, Pat Gelsinger, virtually met with President Joe Biden and his administration on Monday urging the federal government to fund his vision of boosting domestic semiconductor manufacturing to new heights for the sake of national security and solving major semiconductor supply chain issues.

“I believe our moonshot should be that one-third of the supply of semiconductors should be back on American soil by American companies,” said Gelsinger in an interview with CNBC this week. America’s share of the global chip manufacturing market was 37 percent in 1990, but has fallen to 12 percent in 2021, with Asia dominating the industry at over 70 percent share.

“We’ve become way too dependent on too small of a footing in Asia. We need a more balanced supply chain globally,” said Gelsinger. “Intel is ready to step into that. I announced two new fabs [chip production plants] in Arizona and we’re ready to put the next ones in place in the U.S. It’s so critical that the administration [and] Congress step forward, get this funding in place, start that acceleration of the industry, because these take years to build up and we need to build a more diverse supply chain. … We must act now.”

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Gelsinger said the only way to address this economic and national security risk, while at the same time spurring the creation of American jobs, is to increase domestic semiconductor manufacturing capacity.

Last month, Intel announced a $20 billion investment to expand its manufacturing capacity in America, starting with two new chip production plants in Arizona that would create 3,000 high-tech jobs as well as 15,000 local long-term jobs.

“We also opened our fab doors wide, creating a new business, Intel Foundry Services, to provide manufacturing capacity based in the U.S. and Europe to other companies and governments,” said Gelsinger in a recent blog post. “Semiconductors are the fifth-largest U.S. export sector, supporting a quarter million domestic jobs directly and over a million indirectly, but there is room to grow the industry further as U.S. companies capture more of the domestic and global demand. To do so, we need a partner and we hope the federal government will become that partner.”

Gelsinger is aiming to get U.S. funding from President Biden’s $2 trillion American Jobs Plan, which he points out includes $50 billion in semiconductor manufacturing investments. Intel’s CEO met virtually during a semiconductor White House summit on Monday alongside other tech leaders from the like of Google, AT&T and Samsung.

“[President Biden’s] plan recognizes that investment today will lead to increased technological research and development, innovation, job creation, sustainable supply chains and advanced manufacturing for tomorrow,” Gelsinger said. “We believe this program can help restore U.S. semiconductor manufacturing leadership, a worthy moonshot for our nation.”

Bob Keblusek, chief technology officer at Downers Grove, Ill.-based Sentinel Technologies, a leading national solution provider, said it would be great for America to have “control” of its own critical infrastructure and supply chain.

“It’s become a world economy, but at the same time, we have to continually look at all the different things we deem critical and important for national security to make sure we’re in a comfortable position and have enough control over those things to protect ourselves and be self-sufficient,” said Keblusek, who has over 25 years of experience in the tech industry. “I like [Gelsinger’s] plan. It’s a good idea.”

Keblusek pointed at significant supply chain issues over the past 12 months stemming from the global COVID-19 pandemic that have hurt Sentinel Technologies and its customers.

There’s been instances when Sentinel couldn’t fulfill the needs of customers, some of which were healthcare organizations, due to supply chain issues with manufacturing being overseas.

“So we’ve got customers that are looking to upgrade infrastructure for various reasons, but some manufacturers can’t keep up with the supply because of [COVID] -- yet there’s incredible demands. So we’re sometimes unable to get customers the gear needed to improve their infrastructure in order to support that. We’re seeing lead-times, optimistically, in the three- or four-month ranges,” said Keblusek. “So it’s pushing these projects out and even impacting critical care facilities to where we need to get infrastructure in to help them support us and save lives. But we can’t get the equipment. So it’s definitely been a challenge. It increases our own costs as well.”

Furthermore, Keblusek said Gelsinger’s plan would work in America now more than ever as manufacturing has become highly automated.

“When the U.S. was doing more manufacturing in the 1990s and 1980s, manufacturing was not as automated as it is today. A factory then looks different from now, especially around manual-type labor,” he said. “I think that there’s a lot of reasons why bringing that home and closer to where we are using equipment from the U.S. standpoint, makes a lot of sense.”

Gelsinger said this is a “no-brainer” opportunity for America that the federal government needs to throw its weight and funding behind.

“There’s certain aspects of this that I would say is a no-brainer. It underlines every industry, American competitiveness -- this is so straightforward,” Intel’s CEO said. “The U.S. used to be, 20 plus years ago, at 37 percent of the global [semiconductor] supply. Today we’re at 12 percent and heading towards less than 10 percent. This is like the most critical technology that we’re going to lose control of in that supply chain – we must act now. We must not only flatten that but start the rise.”