Intel CEO Pat Gelsinger (Credit: WEF official website)
BEIJING, January 22 (TMTPOST) – Intel CEO Pat Gelsinger said that China is about ten years behind Intel in chipmaking capabilities during a conversation of with Executive Chairman of the World Economic Forum Klaus Schwab at the 2024 WEF annual meeting in Switzerland last week.
During the conversation, Gelsinger said that the export policies of the U.S., Japan, and the Netherlands have restricted China’s chip manufacturing capabilities within the range of 10 to 7 nanometers.
The Biden administration has imposed a host of export restrictions since 2022, hindering Chinese chip manufacturing and development. These restrictions not only prohibit the export of cutting-edge chips but also involve chip design software, manufacturing equipment, and components built in the U.S.
Gelsinger asserted that the gap between China and the world’s advanced chipmakers will persist for the next decade.
Financial reports show that as of the third quarter of the 2023 fiscal year ending on September 30, Intel achieved revenue of $14.2 billion, representing a year-on-year decrease of 8% and a quarter-on-quarter increase of 9%. For the entire first three quarters of 2023, the company’s revenue reached $38.8 billion.
Based on the company’s fourth-quarter revenue forecast, its revenue for the 2023 fiscal year is expected to reach $53.4 billion to $54.4 billion, far below the $63.05 billion for the 2022 fiscal year. In 2022, Intel’s revenue in China accounted for about 27%, a share second only to that in the U.S.
During the conversation, Gelsinger discussed the vulnerability of the global supply chain, saying that the chip supply chain issues were first exposed under the COVID-19 pandemic. He said that chip manufacturing is concentrated in Asian countries partially due to policies over the past few decades, and the U.S. is trying to reverse this trend through the CHIPS and Science Act, which aims to enhance America’s technological self-sufficiency.
With the implementation of the act in the U.S. and the European Union, the Intel CEO predicted that 50% of chips will be manufactured in the U.S. in ten years.
According to CNBC, while discussing the impact of the new U.S. semiconductor export control regulations on Intel, Gelsinger said that the company will continue to adjust its business and products to adapt to the constantly changing policy environment, setting technical indicators consistent with industrial policies.
Gelsinger said that February 15, 2024 will mark his third anniversary as CEO of Intel, and the reconstruction of the supply chain has made great progress, but the completion of the factories in Ohio will take a long time.
Semiconductor is a R&D and capital-intensive industry. There are only three companies in the world capable of manufacturing advanced chips: TSMC, Samsung, and Intel. Gelsinger said that Intel invests $18 billion in research and development every year. The company’s capital investment exceeded $25 billion in 2023, and will continue to increase in 2024, 2025, and 2026. Currently, Intel has a total of 50,000 engineers, with 20,000 of them in the core technical field.
The Intel chief said that Intel will produce advanced Intel 18A process chips at the semiconductor manufacturing plant in Magdeburg, Germany, but did not disclose the specific technologies that will be used.
“By 2025, we will have proven to the world that…2 nanometer chips based on western technology are simply the best in the world, and we’re pretty proud to be in that race,” Gelsinger said.
(Note: 1 yuan equals $0.14.)
(This article was first published on the TMTPost App. Author | Lin Zhijia)
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