Intel CEO wants to create ‘the world’s most resilient supply chain’

Intel CEO Pat Gelsinger said there’s so much turmoil in the world that he wants Intel Foundry to create the “world’s most resilient supply chain.”

He noted 80% of the supply chain is currently based in Asia. He said that’s not secure and we need “resilient” supply chains where the technology industries are. He noted that the pandemic, wars in Israel/Gaza and Ukraine, and tension in the straits of Taiwan have made it clear that the world needs a better, stronger, and less vulnerable supply chain as we gear up for the AI economy.

He also noted that for the long term Intel has to do the “right thing” to make sustainable supply chains that last. He made the remarks as Intel announced Intel Foundry, a chip manufacturing business that will make chips for all comers, with much of the manufacturing done in the U.S. thanks to strategic subsidies made possible by the U.S. Chips and Science Act.

Intel has $15 billion in deal value worth of customers for Intel Foundry now, Gelsinger said.

Gina Raimondo, secretary of commerce, said during the event that COVID-19 revealed how vulnerable the tech supply chain was and “we need to get back to work making more chips in America. Bringing back the silicon to Silicon Valley.”

She said we need to get a “massive flywheel” back to America and create hundreds of thousands of research and engineering jobs in the U.S. Gelsinger said Intel hasn’t announced its “chips grant” yet but it will happen soon.

“America is able to out-compete, out-innovate,” Raimondo said. “This is about getting a flywheel going. Intel is this country’s championship company.”

But she said if that is all we do — build 10 factories — that is a shame. Gelsinger said that Moore’s Law — the prediction by former Intel CEO Gordon Moore, who predicted in 1965 that chips would double capacity and performance every couple of years — is alive and well. By staying on that track, the chip industry has given us everything from space rockets to AI.

Because of Moore’s Law advances, Intel’s latest graphics processing unit (GPU) has more than 100 billion transistors, compared to 2,300 transistors in the Intel 4004 CPU in 1971. Gelsinger said Intel has taped out its latest 18A manufacturing node chips and Intel added the 14A node as a future target beyond 2025.

Gelsinger said that 15% of every economic endeavor is fueled by the digital economy. That will be 30% by 2030.

“We are stewards of the digital economy,” Gelsinger said.

This is perhaps the most nationalistic talk I’ve heard since the Japanese challenge to the chip industry in the 1980s, and it’s probably about time for that.

Microsoft CEO Satya Nadella confirmed that Microsoft will make an AI chip using Intel’s foundry service.

Stuart Pann, head of the Intel Foundry business, cited a book Chip Wars by Chris Miller, who said Intel was one of the most important companies of the last 50 years.

“Get ready for Chip Wars Season Two,” Pann said.

He said that the time has come for system evolution because “the times they are a changin’.” He said Intel aims to have 100% renewable energy sourcing by 2030. He also said the U.S. military needs tech to give it “asymmetrical advantage” in the future.

The Intel-based HP supercomputer has 100,000 CPUs and 300 miles of cable. The New York Times ran a story that AI could use as much electricity as an entire country. The notion is to do this more cost-effectively, Pann said.

“We are the stewards of Moore’s Law,” he said.

Intel announced it has 30 partners for the Intel Foundry business.

Pann said Arm is Intel’s “most important business” partner as Arm CEO Rene Haas came on stage. Pann said it’s a brave new world. Haas said on stage, “This is a bit of strange bedfellows….This is industry changing and we need to be a part of it.”