Intel wants to build ‘everybody’s AI chips,’ CEO says, as company plays catch-up with rivals

Technology

Intel wants to regain its position as the world’s leading chipmaker, CEO Pat Gelsinger said, after being overtaken by rivals TSMC and Samsung in recent years.

“We want to build everybody’s chips, everybody’s AI chips. We want them to be built leveraging the U.S. factories,” Gelsinger told CNBC on the sidelines of the Computex tech conference in Taipei on Tuesday.

Intel seeks to boost its struggling foundry business, which posted a wider operating loss of $7 billion in 2023 versus the prior year. It is currently not in the top six foundries by revenue, according to a Counterpoint Research report on May 22.

The company was the world’s largest chipmaker until 2017 when Samsung Electronics surpassed it in revenue. Taiwan Semiconductor Manufacturing Company reportedly overtook Samsung in 2023 to become the world’s largest foundry by revenue.

“The first piece is to get back to leadership, because a lot of the losses are associated with having uncompetitive process technology,” said Gelsinger.

As much as $8.5 billion in CHIPS and Science Act funding from the Biden administration, with another potential $11 billion in offing, is expected to help Intel advance its semiconductor manufacturing and research and development.

“The capital is critical. And what we said is that we have to have economic competitiveness if we’re going to build these factories in the U.S. and that’s what the chips Act has done. It’s created a level playing field if I were building a factory in Asia versus U.S.,” Gelsinger said.

Intel, which designs chips as well, also wants to catch up with Nvidia and AMD after having largely been on the sidelines of the AI frenzy which saw tech giants MetaMicrosoft and Google buying up as many Nvidia chips as possible.

During Computex tech conference in Taipei on Tuesday, Gelsinger unveiled the new Xeon 6 processor for data centers with improved performance and power-efficiency compared to its predecessor.

“Xeon 6 was a big step forward in our competitiveness to not only hold on to our market, but regain some of those market share opportunities that we’ve lost,” said Gelsinger.

“And as we get through that and get back to [chip manufacturing] process leadership, we will also have much better profitability, as well,” he added.

China remains a big market

China remains an essential market for most U.S. chipmakers including Intel despite Washington’s efforts to restrict chip sales to the country and amid Beijing’s push to reduce foreign reliance in the semiconductor sector.

“China is a big market for Intel today, and one that we’re investing in to be a big market for Intel tomorrow,” said Gelsinger.

“And as I would like to say, navigating carefully, build products, make sure that we’re obeying the laws of both countries, but also then build products that are compelling.”

U.S. chip giants IntelBroadcomQualcomm and Marvell Technology all generate more revenue from China compared with the U.S., data from S&P Global compiled in March showed.

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