April 5, 2023
Intel has unveiled a plan to bring the production of semiconductors back to the United States. The move is a direct challenge to the chip industry’s reliance on China and Taiwan, and its implementation may lead to a shift in global manufacturing.
After lagging behind in the race for advanced chip manufacturing, Intel’s CEO, Pat Gelsinger, has developed a $20 billion plan that involves deploying foundries in the U.S. Gelsinger also cut executive pay, executed layoffs, and reduced the dividend payout to shareholders to finance the plan.
Intel’s U.S.-based foundries will use ASML’s latest technology in extreme ultraviolet lithography, which enables the creation of 10-nanometer chips, codenamed Sierra Forest. The plan is to put Intel back in the running for artificial intelligence and data center customer preference, and to provide customers with an alternative to competing foreign products. The new foundries will provide increased market share and governmental support as the U.S. works to domesticate the chip industry.
Intel’s revival strategy, which emphasizes moving away from China and Taiwan, comes at a time when the chip industry is experiencing more geopolitical risk and volatility. China has placed restrictions on chip exports, while the United States has retaliated by restricting chip manufacturing machinery to China.
Intel’s Sierra Forest chips are set to become direct competitors to the GPUs made by NVIDIA, which currently dominates the GPU market. Intel’s move to bring chip manufacturing back to the U.S. is also aimed at establishing control over the supply chain and lessening reliance on other countries.
The sources for this piece include an article in Nasdaq.
