Pat Gelsinger, Intel’s Ex-CEO, Highlights That U.S. and NVIDIA Funding Is Useless Without “Filling the Fabs”

Pat Gelsinger, Intel’s former CEO, recently shared his insights on the significance of Intel’s latest equity agreements, particularly emphasizing the need for these deals to support the company’s manufacturing ambitions.

Intel’s Equity Agreements: Focusing on Manufacturing Growth

Gelsinger played a pivotal role in revitalizing Intel’s Integrated Foundry Services (IFS) during challenging economic times. His initiatives, including the ‘5N4Y’ strategy, were instrumental in laying groundwork for cutting-edge technologies such as the 18A chip process. In a recent interview with CNBC, he addressed Intel’s recent equity partnerships with NVIDIA and the U. S.government, highlighting the critical need for tangible progress in Intel’s manufacturing capabilities.

“Just great to be on the show and see you all again. The metric that matters regarding the U. S.government’s stake in Intel is whether it leads to the building and filling of Intel fabs. If it results in more fabs being constructed and utilized in the U. S., then it’s beneficial. Otherwise, it’s a question of policy. The market reacted positively to the announcement, but so far, none of the additional equity has secured a commitment to utilize Intel fabs.”

Despite Intel’s ambition, recent partnerships have not yielded a firm commitment to support its foundry business. While the government’s investment may encourage American companies to back Intel’s operations, no significant agreements have emerged as of yet. NVIDIA’s CEO, Jensen Huang, and AMD’s CEO, Lisa Su, were also questioned about potential commitments to Intel’s foundry, but neither provided a clear response.

Intel 18A Process Node Offers 25% Higher Frequency At ISO & 36% Lower Power At Same Frequency Versus Intel 3, Over 30% Density — Intel’s 18A wafer | Image Credits: Intel

During the interview, Gelsinger discussed the CHIPS Act, initiated under the Biden administration, expressing disappointment over the delays in fund allocations, which hindered Intel’s ability to advance its fab projects at that critical juncture. He noted that the potential benefits of these current partnerships would be limited unless they lead to actual enhancements in Intel’s foundry capacity.

Reflecting on Intel’s historical challenges, Gelsinger remarked on the extensive operational issues he inherited, suggesting that restoring Intel as a leader in technology and manufacturing would require at least five years of concerted effort. He viewed the successful release of the 18A process as a significant milestone in this journey, asserting that it embodies his vision for a reinvigorated Intel.

“Intel made a set of bad decisions over 15 years. This was the rebuilding process for Intel. We lost technical leadership and were not led by technologists for many years. The effort to rebuild our core technology, manufacturing, and supply chains is ongoing and critical. We haven’t fully achieved our goals yet, but the 18A milestone marks an important step in that direction.”

Looking ahead, Intel under CEO Lip-Bu Tan appears to be on a promising trajectory; however, the success of recent equity deals hinges on their ability to accelerate the company’s manufacturing capabilities. Without commitments towards enhancing the foundry business, the long-term benefits of these partnerships remain uncertain.