At the 2023 World Economic Forum, Intel CEO Pat Gelsinger claimed the U.S. CHIPS and Science Act was a “turning point” in global competition with China.
“The CHIPS and Science Act was a clear statement that we are going to win back the semiconductor industry, we are going to be manufacturing it,” Gelsinger said on “Mornings with Maria” Tuesday.
“But it was also the CHIPS and Science Act. And many of those elements are for health care, are for A.I., for long-term leadership. So I’m a real optimistic here that our approach to being this open, collaborative, innovative society, The rebuilding of key manufacturing and semiconductor industry is that underlayment for it… I think the future is very bright, and we’ve seen the most significant step through the CHIPS Act to help make that happen.”
In August 2022, Congress approved $52.7 billion for semiconductor manufacturing and research and a 25% investment tax credit for chip plants that is estimated to be worth $24 billion.
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The legislation aims to improve competition with China by strengthening U.S. manufacturing, supply chains and national security, and invests in research and development, science and technology.
Gelsinger noted that the renewed commitment to American manufacturing and the semiconductor industry will help the overall global economy in addition to cutting dependence on Taiwan.
“Everything is becoming more and more digital and everything digital runs on semiconductors. So this is critical to every aspect of human existence,” he said. “Where the oil reserves are [located] defined geopolitics for the last five decades; where the technology supply chains and semiconductors are located will define geopolitics for the next five. It’s that important.”
Intel has grown its semiconductor manufacturing by opening new plants beyond Silicon Valley including Arizona and Ohio. Gelsinger said bringing these advancements into central hubs of U.S. manufacturing show “the Rust Belt ends and the Silicon heartland begins.”
While the U.S. and Europe have moved to boost semiconductor industries, Gelsinger emphasized the importance of restoring the “interdependency” of the supply chain.
“So if I could make something $0.10 cheaper, I’d go make it there. But if that caused the consolidation of a single port, a single island, a single place in the world that everything is dependent upon, that’s not good for geopolitics. One earthquake, one natural issue, one shutdown, one pandemic issue. All of those caused this radical disruption in the supply chains of the world,” Gelsinger said.
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“We need to rebalance those supply chains. We need resilient supply chains. And our investments in the U.S. are a piece of that. Get back to technology leadership and have the manufacturing capacity to build and satisfy our industries for the future,” he added, noting this is a key focus of the 2023 World Economic Forum.
Gelsinger echoed the concerns of a majority of chief economists at Davos who said in a survey they expect a recession in 2023.
“We don’t see any good news in the near term,” he said. “I think the first half of this year will be pretty rugged because [of] China [and] COVID, Europe [with] energy and Ukraine, U.S. [and] inflation. So when you look across the three major markets, I don’t see any good news.”
Despite his pessimistic outlook for 2023, the Intel CEO also emphasized developments in the U.S. semiconductor and technology industries are investments for the “long term” that will manifest in the second half of the decade rather than the second half of the year.
“A three-quarter economic cycle should not dictate a five-year capital build-out plan. You just can’t make those decisions. And we see semiconductors doubling this decade. So I need to be building the capacity for that. And it is exactly what Jamie [Dimon] said, that long-term investment strategy.”
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“So we need the support of the financial sector to go do that. We need the support of our public-private partnerships with government to go do that. And we are underway making some big long-term bets on the future of the technology industry.”
FOX Business’ Landon Mion contributed to this report.