"US Intel's 'Savior' Shouts to Reduce Asia's Semiconductor Dependence"

Pat Gelsinger, Intel Chief Executive Officer (CEO)

[Asia Economy Reporter Jeong Hyunjin] "Too much of semiconductor supply and manufacturing is concentrated in Asia. We need to find balance in the supply chain."

Pat Gelsinger, CEO of U.S. Intel and known as the company's 'savior,' announced plans to re-enter the foundry (semiconductor contract manufacturing) industry just over 40 days after taking office, emphasizing Intel's presence in the U.S. and European markets. In an interview with Yahoo Finance on the 26th (local time), he said, "The world wants a more balanced supply chain," adding, "Right now, it is too concentrated in Asia. We are one of the few companies that can step into the U.S. and European markets."

Gelsinger, who returned to Intel after more than a decade, highlighted the issue of 'Asia concentration' in this announcement. This emphasis comes amid the Biden administration's executive orders since last year to review the domestic semiconductor supply chain due to ongoing chip shortages, promising investments in the industry. The European Union (EU) also announced earlier this month that it aims for semiconductor production within Europe to account for 20% of global production by 2030, signaling its intention to grow the semiconductor industry.

According to the Semiconductor Industry Association (SIA), the U.S. share of global semiconductor production was 12% last year, down significantly from 37% in 1990. Asian countries such as Taiwan, Korea, Japan, and China account for 80% of the total. As a result, movements toward semiconductor self-reliance have increased in the U.S., Europe, and other regions since early this year.

It is rare for a company's strategic announcement and subsequent CEO interviews to highlight the nation so prominently. Typically, companies emphasize economic logic such as current market conditions, future outlook, and consumer demand to grow profitable areas or establish new growth engines. In Intel's case, there had been expectations that it might choose fabless models due to recent struggles in semiconductor technology development and production. However, what CEO Gelsinger presented was a message of expanding semiconductor demand along with a re-entry into foundry to 'rebalance the supply chain.'

At the strategy announcement event the day before, when asked if the decision was made because of government support, Gelsinger said, "It was not decided because of government support." In the Yahoo Finance interview that day, he also emphasized, "This investment decision was made without federal or state government support."

However, he mentioned that their strategy aligns with what the U.S. and European governments desire. He said, "We are ready to meaningfully accelerate with their (government) help," adding that semiconductor-related support measures discussed by the U.S. or European governments would help secure supply chain balance. He also publicly disclosed ongoing meetings with U.S. administration officials and emphasized in multiple interviews that Intel would receive their support. This appears to show Intel's intention to strategically leverage such support to overcome profit slumps and other challenges.

Industry insiders believe that since Taiwan's TSMC and Samsung Electronics, the top one and two foundry companies, are leading and pouring massive investments, it will be difficult for Intel to catch up in the short term. However, if Intel's technological capabilities combine with U.S. government support, it will inevitably become a threat in the mid to long term. One market research firm even predicted that Intel could rise to the third-largest foundry company within three years.

This content was produced with the assistance of AI translation services.