“Artificial intelligence (AI) is changing the world and presents new opportunities for American semiconductors.”
Intel CEO Pat Gelsinger stood at the podium at the San Jose Convention Center in the U.S. on the 21st (local time) and poured out ambitious words such as “reconstruction of the U.S. supply chain” and “foundry leader in the AI era.”
It wasn’t just CEO Gelsinger. At Intel’s first foundry (consignment production) event, ‘Intel Foundry Services (IFS) Direct Connect 2024’, U.S. Secretary of Commerce Gina Lemondo announced ‘Season 2’ of the Semiconductor Act, which will provide massive subsidies to the U.S. semiconductor industry, and promised continued investment. did. Satya Nadella, CEO of Microsoft (MS), and Sam Altman, CEO of OpenAI, also showed their faces. U.S. AI industry leaders and even key U.S. administration officials came together and pledged to support Intel.
What stood out in Intel’s announcement on this day was the roadmap that it would succeed in mass producing 1.4nm (nanometers, one billionth of a meter) chips by 2027 and the part that Microsoft would purchase 1.8 nano chips from Intel. ‘Nano process’ refers to an ultra-fine process that improves chip performance by reducing the width between each circuit drawn on the wafer in nanoscale.
To date, the only companies that have succeeded in mass producing 3 nanometers are TSMC and Samsung Electronics. Intel has also struggled with the 7nm process in the past. Intel Foundry’s market share was around 1%, and it was unclear whether it would secure meaningful customers.
The reason Intel showed confidence that it would surpass Samsung was because it met a strong ally in the U.S. AI ecosystem. Intel announced on this day that it had succeeded in winning orders worth about $15 billion (20 trillion won) from customers, including Microsoft, which has emerged as the world’s No. 1 company in market capitalization. This is interpreted to mean that the United States will begin to rebuild the semiconductor ecosystem based on the explosive growth of the AI industry.
Coincidentally, American AI big tech companies such as Microsoft, OpenAI, and Meta are turning to developing their own AI chips to break away from dependence on NVIDIA. We are also desperately looking for a foundry partner that can make customized chips. Last year, MS unveiled its own AI chip called ‘Maia 100’, and the semiconductor industry believes that Intel will take charge of the production of this chip.
Sam Altman, CEO of OpenAI, was also asked in a conversation with CEO Gelsinger on this day, “Are we actually raising $7 trillion to establish an AI chip company?” and responded, “The key point is that we need a lot more chips for AI computing. “We need more investment than we think,” he emphasized.
Intel, a Silicon Valley staple, announced a re-challenge in the foundry industry in March 2021. It has been a month since the Joe Biden administration issued its first executive order to inspect the supply chain of key industries, including semiconductors. This executive order came out of concerns that cutting-edge semiconductors at the time were being produced only in Taiwan and Korea.
Since then, Intel has continued to act as a ‘one team’ with the Biden administration. CEO Gelsinger attended President Biden’s semiconductor law signing ceremony in 2022. Intel later promised a total investment of $50 billion (66 trillion won) in Ohio and Arizona. It is also considered one of the companies that benefited the most from the U.S. semiconductor law. The Biden administration is discussing a plan to provide subsidies worth 13 trillion won to Intel in early March.
The United States, which has an advantage in semiconductor development and design, is likely to continue investing in Intel in the future to strengthen its advanced semiconductor manufacturing competitiveness that has been lost to TSMC and Samsung Electronics. In fact, Secretary Lemondo attended the event via video and said, “The fact that the U.S. public and private sectors have taken such a strategic step is comparable to the space war of the 1960s,” and added, “The United States cannot make all chips, but the cutting-edge chips essential in the AI era are (from Asia). ) We have to bring it to the United States,” he emphasized.
An official in the domestic semiconductor industry predicted, “It is unclear whether Intel has the yield rate to surpass Samsung Electronics or TSMC’s technology, but if U.S. Big Tech and the government fully support it, it is a factor that cannot be ignored.”
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Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.