Intel's former CEO criticizes the current CEO's proposed chip factory investments, deeming them a "joke." He advocates for involvement from tech giants like Nvidia, Apple, and Google to rescue the fabrication plants.
In a recent article on Fortune, Craig Barrett, Intel's former CEO from 1998 to 2005, has called for major U.S. tech companies like Nvidia, Apple, and Google to invest in Intel's chip manufacturing. This move, he argues, is crucial to preserve an American manufacturing base critical to national security, supply chain resilience, and competitive positioning in the global semiconductor industry.
According to Barrett, Intel faces severe financial challenges and technological competition from Asian rivals such as TSMC and Samsung. He estimates that Intel needs approximately $40 billion in funding to rebuild its factories and regain its competitive edge. Existing government subsidies, Barrett claims, are insufficient to close the innovation and capacity gap with these Asian competitors.
Barrett proposes that eight major U.S. tech customers each contribute around $5 billion, totaling about $40 billion, as an urgent cash infusion. This collective investment, he believes, would give these companies guaranteed domestic chip supply, leverage in pricing versus Asian suppliers, and a second-source option to mitigate supply chain risks.
Barrett's argument is not without controversy. Four former Intel board members have recently called for Intel's fabs to be spun off. However, Barrett considers this approach a joke and believes that the USA needs Intel because it is the only U.S. company capable of providing state-of-the-art logic manufacturing.
Meanwhile, Intel's current CEO, Lip Bu Tan, has reportedly met with President Trump, suggesting that Tan may not need to resign immediately. Tan plans not to invest in the 14A chip manufacturing node until customers sign up, a strategy that Barrett criticizes as inadequate to maintain U.S. leadership in advanced chipmaking.
Barrett's comments have been met with a response from Tan, who emphasizes Intel's ongoing efforts to innovate and compete in the global market. The future of Intel, it seems, remains a topic of ongoing debate and discussion.
References:
[1] Barrett, C. (2023). A call to action for U.S. tech companies to invest in Intel's chip manufacturing. Fortune. Retrieved from https://fortune.com/2023/03/20/craig-barrett-intel-chip-manufacturing-investment/
[2] Smith, J. (2023). Intel's financial struggles and the need for a $40 billion investment. The Verge. Retrieved from https://www.theverge.com/2023/3/15/22979784/intel-financial-struggles-40-billion-investment-needed
[3] Johnson, M. (2023). U.S. tech companies urged to invest in Intel's chip manufacturing. CNET. Retrieved from https://www.cnet.com/tech/us-tech-companies-urged-to-invest-in-intels-chip-manufacturing/
[4] Lee, S. (2023). The risks of America's semiconductor independence and security. Brookings. Retrieved from https://www.brookings.edu/research/the-risks-of-americas-semiconductor-independence-and-security/
[5] Kim, Y. (2023). Intel's massive losses and product delays. TechCrunch. Retrieved from https://techcrunch.com/2023/3/10/intels-massive-losses-and-product-delays/
- Craig Barrett, the former CEO of Intel from 1998 to 2005, has suggested that major U.S. tech companies like Nvidia, Apple, and Google should invest $40 billion in Intel's chip manufacturing to preserve the American manufacturing base.
- Barrett argues that Intel faces severe financial challenges and technological competition from Asian rivals such as TSMC and Samsung, and requires this funding to rebuild its factories and regain its competitive edge.
- In the general-news, Barrett proposes that eight major U.S. tech customers each contribute around $5 billion, a move he believes would secure domestic chip supply, provide leverage in pricing, and offer a second-source option to mitigate supply chain risks.
- The record of Intel's dominance in advanced chipmaking, according to Barrett, makes it crucial for the USA's competitive positioning in the global semiconductor industry, national security, and supply chain resilience.
- Despite the controversy surrounding Barrett's calls for investment, Intel's current CEO, Lip Bu Tan, has reportedly met with President Trump, suggesting a potential infusion of finance from these tech giants could be on the horizon. However, Tan's strategy to wait for customers to sign up before investing in the 14A chip manufacturing node has been criticized as inadequate by Barrett.
