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TSMC founder Dr. Morris Chang had predicted three years ago that Intel CEO Patrick Gelsinger might be unable to drive meaningful change at the company. Intel announced yesterday Gelsinger would step down from his role and be replaced by two co-CEOs as the firm searches for Gelsinger's replacement. The former Intel CEO took over the firm amidst much fanfare in 2021, and he quickly announced a bold strategy to re-establish the firm's process technology leadership and set up a contract manufacturing division to compete with the Taiwan Semiconductor Manufacturing Company (TSMC).
TSMC Founder Believed In 2021 Intel CEO Was Too Close To Retirement Age To Drive Change
Gelsinger, who took charge at Intel in 2021, soon made the news with his remarks about TSMC. Before his tenure, Intel had gradually ceded manufacturing leadership to TSMC which was supplying big-ticket names such as NVIDIA and Qualcomm with their chips. Its contract manufacturing model had made it one of the biggest firms in the world, and Intel was dealing with Apple's blow of deciding to switch to in-house processors for the MacBook lineup.
TSMC also manufactures these processors, and Apple's switch signaled to the industry that TSMC's manufacturing processes could stay at par with Apple's attempt at using non-x86 micro architecture for personal computing chips.
In the same year, Gelsinger also aimed TSMC by pointing out that the firm's manufacturing facilities in Taiwan carried geopolitical risks due to tensions between Taiwan and China. At a Credit Suisse event, Gelsinger commented that "the world needs a more resilient, geopolitically balanced supply chain," and added that his firm was "seeing a lot of enthusiasm to support us moving into that market."
Gelsinger's comments created quite a bit of a stir in Taiwan, with TSMC's former chairman, Dr. Mark Liu, and founder, Dr. Morris Chang, both responding to him. Liu shared that TSMC does not "speak ill of other companies in the industry," going on to add that Gelsinger's sentiments were not widely shared in the semiconductor industry.
Chang was more direct in his response, advising Intel to focus on TSMC's weaknesses if he wanted to succeed in his turnaround efforts. He also fondly recalled a 2015 meeting with Gelsinger, which impressed him with the executive's ability to aptly summarize Intel's storied history in just 15 minutes. The fondness surprised Chang by Gelsinger's latest remarks.
TSMC's founder attributed Gelsinger's sentiments to his need to secure government subsidies for Intel. Under the Biden-Harris Administration's bipartisan CHIPS And Science Act, Intel has received $7.8 billion in subsidies to support domestic chip manufacturing in the US.
Chang added that while Gelsinger's plans were ambitious, Intel's mandatory retirement age 65 left him with little time to execute a turnaround. Gelsinger was 60 years old at the time, and he will turn 64 in March next year. His tenure at Intel saw the executive firefighting on multiple fronts. Not only did the high inflation and interest rate environment harm Intel's personal computing market and made it difficult for the firm to raise capital, but NVIDIA's dominance in the AI industry all but ensured that Intel was left playing in yet another market dominated by others.
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.
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