What just happened? It is often said that global politics (and wars) are influenced by three factors: oil, land and religion. According to Intel CEO Pat Gelsinger, semiconductors will join this list and become more important than the location of oil reserves over the next five decades.
Speaking to CNN correspondent Julia Chatterley at the World Economic Forum in Davos, Gelsinger noted that the location of oil reserves has determined geopolitics over the past 50 years. But in the next half century there will be a more important factor: “Where are the technology supply chains and where are the semiconductors being created,” the CEO explained.
In addition to plants in Oregon, New Mexico and Arizona (which the company is expanding), Intel is building new facilities in Ohio, while expanding its international operations in Israel, Ireland, Malaysia, Germany and Italy. The company said it will invest $20 billion in two plants in the U.S. and up to $90 billion in new plants in Europe. Gelsinger says that these investments benefit not only Intel, but are also necessary for “the globalization of the most important resource for the future of the world.”
“We need this geographically balanced and sustainable supply chain,” he said.
The shortage of semiconductors caused by the pandemic affected almost all products with chips, including cars. This led to the adoption of the $280 billion Law on Microcircuits and Science in the United States, of which $52 billion will go to subsidies to chip manufacturers. “If we’ve learned anything from the Covid crisis and this multi—year journey we’ve been through, it’s that we need resilience in our supply chains,” Gelsinger said.
Intel’s CEO said his company and others are now waiting for the funds from the Chip Act to be distributed, which he expects to happen this year. “I’m investing, please come with the money. Because we assume that they will help us make these huge investments.”
Another factor behind the drive to diversify the semiconductor supply chain is Taiwan. The export of integrated circuits from the country, which provides about 50% of the world market, grew by 18.4% last year. Gelsinger had previously warned of the dangers associated with relying on the island state in light of China’s aggressive actions. “Taiwan is an unstable place,” he said in 2021. — Beijing has sent 27 combat aircraft to Taiwan’s air defense identification zone […] Does that make it easier or less for you?”
Adding to these concerns are the words of Chen Wenlin, chief economist at the state—run China Center for International Economic Exchanges, who said last year that China should seize TSMC if the US imposed “destructive sanctions” against China – this was before the US imposed even tougher sanctions on the country related to chips. Since then, the chairman of TSMC has stated that no one can control the company by force, while Taiwan has insisted that there is no need to destroy TSMC facilities in the event of a Chinese invasion.
