The Quest for Chip Manufacturing Resilience
During an annual assembly of prominent tech executives and billionaires in Sun Valley, Idaho, last July, U.S. Secretary of Commerce Gina Raimondo took the initiative to engage in discussions near a picturesque duck pond. Her goal was clear: to leverage her position to assist in revitalizing an ailing national champion in the semiconductor industry.
While media moguls and business leaders busily negotiated deals nearby, Ms. Raimondo held meetings with the chief executives of major companies such as Microsoft and Google. She made a compelling case for them to prioritize sourcing their semiconductors from American manufacturers, particularly from Intel, which she emphasized was crucial for the nation’s semiconductor production efforts.
Over the past year, Ms. Raimondo has made similar appeals during various meetings and phone calls, reaching out to executives at industry giants including Apple, Amazon, Nvidia, AMD, and Marvell Technology. According to eight individuals familiar with these discussions—most of whom requested anonymity—her efforts have largely been met with skepticism. A significant number of these companies have declined her requests, citing that Intel’s chip manufacturing capabilities currently lag behind those of Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading chip manufacturer and their primary supplier.
The reluctance expressed by top tech leaders highlights the challenges Intel faces at a critical juncture when Ms. Raimondo is striving to bolster American chip manufacturing. Her informal role as a promoter for Intel underscores the stakes involved in the company’s resurgence. Intel, a 56-year-old enterprise, is pivotal to President Biden’s broader strategy to enhance domestic semiconductor production.
While the Biden administration’s initiative encompasses a wide array of companies, a significant portion of its ambitions is intertwined with Intel’s success. The company played an instrumental role in advocating for the 2022 CHIPS Act, which aims to fortify the United States’ position in the global semiconductor landscape.