Tech war: Intel’s US$7 billion loss a cost of winning back American supremacy in chip production, says chief executive

Name: World’s largest contract chip maker TSMC inaugurates its first plant in Japan
Uploaded: 2024-04-05T03:19:45.000Z
Duration: 3 min 30 s
Description: World’s largest contract chip maker TSMC inaugurates its first plant in Japan

Patrick Gelsinger tells the Council on Foreign Relations having over half world’s chips manufactured ‘just 100km from Chinese soil’ is not sustainable

Once the world leader in semiconductors, the chip maker is a major focus of US President Joe Biden’s efforts to maintain US global tech supremacy

Reading Time:3 minutes

Why you can trust SCMP

Intel chief executive Patrick Gelsinger (left) speaks with US President Joe Biden during a tour of Intel’s Ocotillo Campus in Chandler, Arizona, on March 20. Photo: AFP

Khushboo Razdan

Published: 11:19am, 5 Apr 2024Updated: 3:35pm, 5 Apr 2024

Intel’s chief executive on Thursday downplayed the billions of dollars the once-great chip manufacturer lost last year while declaring the company was amid a historical turnaround to reclaim American supremacy to produce the tiny circuits that power modern gadgets.

“I want people who are committed to the strategic journey of rebuilding the most iconic technology company in American history, who is building long-term manufacturing capacity for the digital future that is more critical to every aspect of human life, the national security and the economic engine. That’s who I want as my investor,” veteran engineer Patrick Gelsinger said.

Gelsinger made the remarks at an event organised by the Council on Foreign Relations, a think tank based in New York.

03:30

World’s largest contract chip maker TSMC inaugurates its first plant in Japan

Earlier this week, Intel reported an operating loss of US$7 billion in 2023 for its chip manufacturing business and predicted losses to peak this year. As a result, Intel shares closed down 8 per cent on Wednesday.

Emphasising that there is only one Western firm among the three companies “on the planet” that can make advanced semiconductors, Gelsinger added that “rebuilding the Western supply chains of the world” could become profitable in the years to come.

“We expect to break even in that business in the 2027 time frame. And then turn nicely profitable,” he said of the company’s plan.

Gelsinger said “part of the problem is we have to significantly overinvest to get back to competitive” against Asian rivals.