In addition to the many insights and other nuggets Intel passed along about Intel Foundry at its premiere customer event in San Jose, CEO Pat Gelsinger nudged US Commerce Secretary Gina Raimondo into saying a second US CHIPS Act, or other funding, is needed.
The main reason is that $39 billion for fab projects in the CHIPS Act created in 2022 is not going to be nearly enough to bolster future US chipmaking amid explosive AI demand, both Gelsinger and Raimondo agreed.
Drafting and passing a CHIPS 2 would be a huge undertaking with the current Congress, which expires early next year anyway. But that didn’t deter Gelsinger or Raimondo from stating the need during an onstage conversation. Raimondo spoke to the Intel audience of 1,000 people—including future potential foundry customers--on Wednesday via a live feed.
“I suspect we will need continued investment, whether you call it CHIPS 2 or something else,” Raimondo said. “If we want to compete globally, we have to continue to invest.”
Of course, many thought she would use the event to award Intel up to a reported $10 billion under the existing CHIPS Act, but that didn’t happen. The biggest award so far has gone to GlobalFoundries for $1.5 billion, plus another $1.6 billion in loans. The company will use the funds for a new 300mm fab in Malta, NY, and upgrades to existing fabs in New York and Vermont.
RELATED: GF to get $1.5B from CHIPS Act for new NY fab, two fab upgrades
Gelsinger has served as the nation’s modern-day Ben Franklin over the past three years as Intel’s (and arguably the nation's) chief chip diplomat, appealing to European countries as well as the US Congress and US states for funds to help build chip fabs. His primary goal is to create a 50-50 parity of chipmaking between Asian and US-European chipmakers in coming years, compared to the current 80-20 imbalance, with heavy Asian superiority.
Meanwhile, Intel will continue to have fabs in Asian locales. Gelsinger even warned that if Taiwan were cut off by China amid rising tensions between the two, the global supply of advanced chips from TSMC and others would grind to a halt in two weeks.
Gelsinger also said Intel Foundry has $15 billion in customer commitments to use its fabs, and expects that number to reach $100 billion in coming years as Intel attempts to reach its goal to become the second largest chip fab behind TSMC in 2030. Many analysts at the event wondered how Intel Foundry will serve both the chip production needs for its own Intel chip designs and the designs of competitors, perhaps AMD and more, but Intel officials said both internal and external customers will be served. (Intel Foundry and Intel, with its production of chips designs, will be legally separate entities, although the foundry is not being spun off.)
Of course, there's another motivation for Intel beside the need to bring chip fabrication to the US, and that's to keep ahead financially of competitors like Nvidia, which posted 269% revenue growth in its latest quarter with results posted just when Gelsinger was speaking to reporters.
RELATED: Nvidia posts another whopper quarter with 269% revenue surge
No, Raimondo didn’t announce funding for Intel, but she did pass along this plum: “Intel is this country’s champion chip company. It’s an American company with a very huge role to play in this revitalization.”