Chip manufacturer Intel Corporation's shares jumped by 7% after Vice President JD Vance asserted that his administration would ensure that AI chips are designed and manufactured in America. Most of the world's AI processors are made in Taiwan by the Taiwan Semiconductor Manufacturing Company (TSMC). GPU designer NVIDIA Corporation's chips account for the majority of the world's AI processor shipments. Vance's remarks saw investors flock to Intel as it is the only American chip manufacturer capable of making high-end chips suitable for AI workloads. Intel's stock has bled more than half of its value over the past year as the firm struggles with a turnaround of its chip manufacturing division and high costs.
US To Build AI Chips To Safeguard Global Advantage, Says Vance
Vance made his remarks as part of his keynote speech at the Paris AI Summit, which was his first foreign trip since taking office. During his speech, the Vice President asserted that AI will not replace jobs and will instead help create jobs in America. He believes AI will facilitate and make people more productive and make the US productive, prosperous and free.
He also outlined that the US is the leader in AI, adding that "our administration plans to keep it that way." Vance believes that the "US possesses all components across the full AI stack, including advanced semiconductor design, frontier algorithms, and of course, transformation applications."
The VP added that the full AI stack - namely chips, algorithms and applications - requires computing power. Developing this power is central to "safeguard America's advantage" in AI. As a result, Vance shared that the "Trump administration will ensure that the most powerful AI systems are built in the US" and use "American designed and manufactured chips."
Since Intel is the only American company capable of manufacturing chips with advanced technologies that are indispensable to the most advanced AI processors, its shares jumped by more than 7% after Vance's remarks. Intel has already received billions of dollars in subsidies through the Biden Administration's bipartisan CHIPS and Science Act - funds which have come right at a time when the firm struggles with its contract chip manufacturing business.
However, since Intel's contract manufacturing business is yet to start volume production, any American chip orders that it can cater to are pushed to the future. Most of the world's AI chips are manufactured by Taiwan's Taiwan Semiconductor Manufacturing Corporation (TSMC) and are designed by NVIDIA. TSMC will start production with its leading-edge 2-nanometer semiconductor manufacturing technology in 2025, and Intel's equivalent technology, the 18A node, is also expected to enter production this year.
Successful execution of 18A production and smooth ramp up at its foundry business is key to Intel's hypothesis. After former CEO Patrick Gelsinger's surprising departure last year, the firm's management has held its cards close to the chest when it comes to commenting on whether it will spin off the manufacturing business and streamline its balance sheet. The shares are up by 5% year-to-date, with today's gain being the largest after a 9% jump in January.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
Follow Wccftech on Google to get more of our news coverage in your feeds.
