Intel's former CEO, Pat Gelsinger, has given his verdict on the recent equity deals made by Team Blue, and he claims that importance must be given to enabling manufacturing ambitions.
Intel's Recent Deals With NVIDIA & the US Administration Don't Discuss Foundry Business At All For Now
When it comes to supporting a successful foundry business, it won't be wrong to say that Gelsinger was one of the key figures in turning around the momentum for the IFS, especially after a time when the firm was in economic downturn. He had brought up several initiatives, such as '5N4Y', which essentially laid the foundations for chips like the 18A. Now, in an interview with CNBC, the former CEO was asked about his opinions around Intel's recent equity-focused deals with NVIDIA and the Trump administration, and here's what he had to say:
Just great to be on the show and see you all again. And you know, is the stake that the U.S. government has taken in Intel, is it good or bad? Right. And to me, the only metric that matters is, does it cause the building and filling of Intel fabs? And if it causes more fabs to be built, more fabs to be filled in the U.S., then it's good.
If that doesn't occur, then it's not, right? You know, it's a question of, you know, policy at that point. And obviously, the market responded a little bit positively to it when it was announced. You know, we've seen some other equity come into Intel, but none of those have yet included a commitment to fill the Intel fabs.
Interestingly, Intel hasn't secured a foundry commitment from any of the recent deals it has managed to secure. While the USG stake will certainly bring influence to American companies to invest in Intel's fab operations, no major deal has panned out for now. NVIDIA's CEO, Jensen Huang, was also asked about the possibility of a foundry commitment from Team Green, but there was no definitive answer. The same was true for AMD's CEO, Lisa Su, as well.
Gelsinger was also asked about the CHIPS Act, introduced during the Biden era, and whether the initiative had managed to catalyze Intel's fab ambitions. He expressed disappointment with former Commerce Secretary Gina Raimondo, claiming that the administration was 'too late' in releasing the funds Intel required to get the financial assistance at that time. However, with the current deals, the former CEO claims that they won't be effective unless they contribute to Intel's foundry business.
Pat Gelsinger also discussed how Intel accumulated 'messy operations' over the years before when he took over the office, and when he was asked about why Intel lagged behind competitors, Gelsinger claimed that for a firm like Team Blue, streamlining foundry and product businesses was something that would take at least five years, and he attributes the success of 18A around his vision, claiming that after half a decade, Intel managed to get out a capable product.
Intel made a set of bad decisions over 15 years. You know, this was the rebuilding of Intel. Lost technical leadership, wasn't led by technologists for many years and rebuilding core technology, manufacturing, supply chains, process technology.
And I said it was five plus years to rebuild the technology base for Intel. We haven't even gotten there yet. 18A last week, an important milestone to that end.
Intel, under CEO Lip-Bu Tan, is defintely heading in the right direction, but the optimism surrounding the recent deals comes with the factor of whether they can speed up Intel's manufacturing ambitions. And based on what we are seeing right now, there's little contribution towards the foundry business.
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