Introduction:
In July 2023, Intel’s CEO, Pat Gelsinger, delivered a compelling speech at the Aspen Security Forum, where he discussed the critical intersection of semiconductors, national security, and the challenges posed by the passing of the CHIPS Act.
Gelsinger’s thought-provoking assertions, particularly his call for a larger portion of the $52 billion US CHIPS Act funding to be allocated to Intel rather than foreign competitors like TSMC and Samsung, ignited discussions around the intricate relationship between trade regulations, national security, and economic prosperity.
Read more: CHIPS Act 1 year later: No funding & Worker Shortage
Gelsinger’s address at the Aspen Security Forum focused on three primary pillars, each aimed at highlighting the need for Intel to receive a more substantial share of the US CHIPS Act funding:
China export controls is bad for Intel i.e USA.
Gelsinger emphasized that China represents a significant portion of Intel’s market, accounting for 25% to 30% of the company’s revenue. To address this demand, Intel has embarked on a $30 billion expansion plan in the US.
However, tightening trade restrictions and escalating geopolitical tensions could potentially hamper Intel’s growth and willingness to invest in domestic projects. Gelsinger posited that if Intel’s China revenue stream is further curtailed, it might deter the company from making substantial investments in US-based operations.
If trade restrictions tighten and further cut this geographic revenue stream, then it could mean Intel may not want to continue to make a significant investment in US projects, which have been touted to be good for US jobs, the US economy, and even US national security.
This argument underscores the potential negative impact of China export controls on Intel’s business and, consequently, the US economy.
Overly Restrictive Trade Regulations:
Gelsinger critiqued the current trade restrictions, highlighting that over 1,000 companies are on the Entity List, many of which have no direct connection to national security concerns in china.
He advocated for a more targeted and nuanced approach, suggesting that a reduction in excessive restrictions would allow resources to be directed toward areas of undeniable national security importance. By arguing for a revision of these regulations, Gelsinger aimed to create a more conducive environment for semiconductor companies to operate and innovate, while still safeguarding national security interests.
Intel should get bigger piece of pie than foreign companies from chips act
Perhaps the most contentious aspect of Gelsinger’s argument was his assertion that Intel should receive a larger portion of the US CHIPS Act funding due to the company’s significant domestic research and development (R&D) efforts.
Unlike competitors such as TSMC and Samsung, Gelsinger highlighted that Intel conducts the majority of its essential R&D within the US. He argued that this distinction warrants a greater share of the funding, as it aligns more closely with the original intent of the CHIPS Act – fostering domestic semiconductor innovation and capability.
Balancing National Security and Economic Interests:
Gelsinger’s plea for Intel to receive a larger slice of the US CHIPS Act funding raises important questions about how to strike a balance between national security imperatives and fostering economic growth. The semiconductor industry is a critical component of modern technology and infrastructure, and it plays an essential role in maintaining a nation’s competitive edge and security.
The CHIPS Act itself reflects the US government’s recognition of the need to bolster domestic semiconductor manufacturing to reduce reliance on foreign suppliers.
Conclusion:
Pat Gelsinger’s speech at the Aspen Security Forum highlighted the complex interplay between semiconductor companies, trade regulations, national security, and economic prosperity. His case for Intel’s greater share of the US CHIPS Act funding underscored the challenges faced by American semiconductor businesses as they navigate a rapidly evolving geopolitical landscape. As discussions continue around the allocation of the CHIPS Act funding and the broader future of the semiconductor industry, finding a harmonious equilibrium between national security imperatives and economic growth will remain a central challenge for policymakers, industry leaders, and the broader public.
