Speaker 1: You know, I became CEO of Intel,
Speaker 2: Intel. Doesn't like being an underdog it's pat Gelsinger job to reclaim the company's chip making leadership. After returning his CEO in February, here's his plan to try to claw Intel back to the top by 2025, When were looking at taking this Intel CEO job, what convinced you to go for it? What told you that this is a, a turnaround that you can
Speaker 1: Accomplish? I was drawn [00:00:30] to the legacy of the founders, you know, Grove more noise. You know, I, I sort of joke that I, uh, joined Intel so young. I went through puberty here. Um, and, uh, you know, I mean, I was trained at the feet of the founders and it's largely in their legacy, you know, Hey, I wanna restore this icon. Uh, secondly, it's critical for the industry. You know, this is the company that puts Silicon in Silicon valley. Right. You know, I just say, you know, you know, a healthy Intel means a healthy industry, but also, you know, this idea that [00:01:00] boy in a global semi in conductor, uh, shortage, you know, rebalancing a more resilient, uh, globally, uh, balanced supply chain. This is critical to the world, to our nation, to our economy, to our national security. So, you know, it's very much sort of driven by those three perspectives.
Speaker 1: And, you know, I, uh, as I was interviewing, uh, for the job, I, I, uh, wrote a, a strategy paper for the board and I said, this is what we should do. And, uh, when they called me for the assignment, [00:01:30] I, I demanded unanimity, right? So every one of 'em had to say they were hiring me and agree with the strategy. Right. You know, so part of the reason we've been able to move rapidly is I already had the boards support before I agreed to the job. And it was really a strategic alignment with board was already done. And with that, I had increased confidence that we could go and execute rapidly and successfully.
Speaker 2: What were the, the, the manufacturing and business aspects that you needed to reassure yourself were solid [00:02:00] enough?
Speaker 1: I, I always felt like there was enough technology littered inside of the company. Right. You know, I mean, you just stumble over fellows and breakthroughs and innovate, you know, just all over this place. Clearly some of that was wandering away, you know, having lost the vision a little bit, but I felt pretty confident that there was plenty of things to build on, you know, was concerned about how we get the process roadmap back in shape. We under invested in capital. You know, I went to the board and said, we're done with buybacks. We're investing in factories. [00:02:30] And, uh, you know, that's gonna be our, you know, the use of our cash, uh, as we go forward and they aggressively supported that, uh, perspective that we needed to just start investing. And those investments, we start creating a, uh, cycle of momentum that would get our factory teams executing better if I'm gonna do a process technology every year. Right. Which is what we've laid out to do, you know, Steven? Well, I needed to give them twice the wafer for the TD experiments, cuz we gotta go twice as fast. The support for [00:03:00] those gave me the confidence that yeah, we can get this machine back to where it was before.
Speaker 2: There's a credibility issue. You've talked a lot about, uh, coming back to the Andy Grove ethos where you make a promise, you Comme, you, you keep that commitment. There have been some big stumbles here in the last few years. So why is it that you are comfortable making those kinds of commitments about a very long, very ambitious roadmap.
Speaker 1: We're measuring these things essentially every week I'm getting updates on these, uh, different aspects. You know, I felt we had the talent, [00:03:30] we had the, uh, you know, capabilities in these areas, but they had to be refired up. We had to restore some of the Grove in aspects of tough, direct data driven, uh, conversations. And we're doing it. You know, we've laid out, uh, product milestones of, you know, how we're gonna execute and deliver upon 'em. And we're now opening up our fabs and our Foundry strategy to scrutiny by very tough engineering teams who are making decisions, [00:04:00] you know, trust me, the Qualcomm team. They know what a Foundry looks like. And we have a lot of work to do, right. You know, a decade of bad decisions. You know, this doesn't get fixed overnight, but you know, the bottom is behind us and the slope is starting to feel increasingly strong.
Speaker 2: There's been a big chip shortage. Obviously it's been problems. People can't buy the cars they want, they can't by the PCs they want. How has that changed your business at Intel?
Speaker 1: Every day, we're getting inbound calls because our customers are struggling with the, the [00:04:30] shortage and, you know, part of our incredible zeal that we have to accelerate our manufacturing, build out and do more of that. Uh, here in us and in Europe is exactly this reason. You know, we just gotta build capacity quicker. Uh, we have to ramp it faster. We have to get better yields more rapidly. We have to get what we call match sets. We have to work with our industry partners because if I give you a laptop CPU, but you don't have an L C D to go with it, you still can't ship the laptop. Right. We gotta work with [00:05:00] the industry more are closely. So it's driving us to re uh, reimagine and innovate our supply chain and the transparency of our customers and their suppliers supply chain with our own. So causing a lot of shift,
Speaker 2: We're looking at the potential 52 billion coming in us, government subsidies. How is that going to move the needle for us? Chip manufacturing, a huge amount of the electronics industry is already overseas. Will this actually make a significant difference?
Speaker 1: [00:05:30] The expectation that I've said is, is that, you know, over the decade in front of us, that we should be striving to bring the us to 30% of worldwide semiconductor manufacturing today it's 12 in, uh, uh, 1990, it was 37% Europe in 1990 was 44% today it's 9%. And the European moonshot, you know, as I've been meeting with the European officials is to get them to 20%, you [00:06:00] know, so 30, 20, 50 in the decade, wow, that's a much more balanced than globally resilient supply chain. Now, obviously, and as your question, uh, suggests there's a lot of other aspects to the supply chain and I believe those need to be more balanced as well, system assembly, package, test other elements of the supply chain. And again, it's not that we're, you know, moving out of Asia. What we're saying is let's build up, you know, capabilities. So that economic balance that we have dependence [00:06:30] know, we have interdependence where each of these regions can operate more independently and we built more natural resilience so that we're not as susceptible to individual locations, national disasters, we get to decide where the fabs are, right. And we should take advantage and put 'em where we want.
Speaker 2: 'em you're talking about two huge new Greenfield sites, one in the us somewhere, and one in Europe, how much are those going to cost? And one, are they going to
Speaker 1: Arrive my objective? And both of those is to announce those new Greenfield [00:07:00] locations before the end of the year, we would expect as we launch both of those, that they would be what we call mega fab locations, that we'd be building them such that we could put up to eight fabs in each of those locations, each fab tenish billion. So you can quickly do the math. And obviously we're anxious for, you know, support from us governments and European, uh, as well to make sure that they're economically competitive, uh, with the Asian alternatives,
Speaker 2: You are investing [00:07:30] a fair amount right now in Arizona, as you mentioned, the $20 billion on fab five and fab six, there is that gonna help increase the capacity in for this chip shortage.
Speaker 1: You know, the, uh, the, these new fabs that we're starting now, you know, it takes about three to three and a half years to bring them on production. Clearly we're hopeful that, and I've indicated that I think that this crisis is, uh, peaks about now, right? The worst of it is Q3 Q4. Each next year gets [00:08:00] incrementally better, right? As we go through it. And, you know, we can expect to get, uh, some level of supply demand balance in 23. We're also making investments in other areas that we'll have more immediate feedback, and we've been able to pull things that, you know, improve our supply.
Speaker 2: Your investments look big until you look at the scale of TSMC invest. And I wonder, uh, do you need to spend even more to keep up with them?
Speaker 1: There's the, the, the club, if I would call it where you need to be, you know, able to be beyond [00:08:30] 10 nanometers, you know, where you're investing well over 10 billion per year, and clearly Intel's in that club, uh, at that level. And then it's really driven by, are you on the leading edge, right? Which we've already talked about, boy, you know, 7, 4, 3, uh, 20, a 18 a. So we're comfortable that we're on the leading edge and we're scaling our investments to meet the increasing demands of the industry. Right? Some of it is to catch up, you know, we should have made some of these investments earlier. And then third is [00:09:00] to get ahead, right? Where, you know, launching our new businesses, expanding, supporting the, uh, Foundry, build out, what is
Speaker 2: Your forecast for continued progress? It seems like each step is harder and harder and delivers less and less. Uh, are we just gonna see sort of a gradual slow progression to, you know, no more
Speaker 1: Progress. We've definitely seen a bit of the slowing, you know, Moore's law used to be a doubling every two years and we've definitely seen, uh, uh, uh, two and a half to three year kind of, uh, shift Steven, the [00:09:30] pace that we're now putting Intel on. I think we're actually pushing back, you know, uh, clay losing that gap. We see a pretty clean path on lithography with our new ribbon fat technology. We see a transistor structure, you know, that we believe is gonna be very healthy through the end of the decade. So we're actually seeing ourself that we've overcome some significant issues and Moore's law. And I actually see a pretty healthy cycle in front of us, but third is this move to 3d, right? With advanced packaging [00:10:00] technologies where I can redefine the partitioning of chips, I can stack them together. So I believe that you're gonna see from 2025, till 2035, a very healthy period for Moore's lawlike behavior.