Intel has suffered badly of late, losing 60% of its value this 12 months because it tries to search out its way within the booming artificial intelligence market while aggressively constructing factories within the U.S. The company is asking Commerce Secretary Gina Raimondo for help.
At a recent meeting with Raimondo, Intel CEO Pat Gelsinger expressed his frustration with the heavy dependence of US firms on Semiconductor manufacturing in Taiwanthe world's largest contract chip manufacturer.
Raimondo then met with a handful of public investors to underscore the importance of chip manufacturing within the U.S. amid growing geopolitical risk around Taiwan, in keeping with people accustomed to the matter who asked to not be identified since the talks were confidential. Raimondo's goal was to persuade shareholders of firms like NVIDIA And Apple to acknowledge the economic advantages of a U.S. foundry that may produce AI chips, the people said.
Intel is currently constructing factories in 4 U.S. states and needs to grow to be more of a foundry company that makes chips for other suppliers. Earlier this 12 months, Intel received as much as $8.5 billion in CHIPS Act funding from the Biden administration and will receive one other $11 billion in loans through the law passed in 2022.
No money has been paid out yet. A senior government official told CNBC that the payments are expected by the tip of the 12 months.
It is an increasingly essential initiative for Intel, which is sinking within the microprocessor market. In addition to losing market share in its core PC and data center market to firms comparable to Advanced micro devicesIntel is hardly represented within the AI sector; Nvidia dominates here.
Intel's foundry efforts have been hampered by delays, say sources accustomed to the matter. TSMC can be constructing a foundry in Arizona and has faced similar problems.
The U.S. Department of Commerce and an Intel spokesman declined to comment.
Intel's board of directors is meeting this week to debate the corporate's restructuring plans, which include the possible separation of the design business from the foundry, in keeping with people accustomed to the matter. Intel Chief Financial Officer David Zinsner told investors at a conference last week that separating the companies is sensible.
“I can predict that we will create a stronger separation between these two companies,” Zinsner said. “It is important for customers to see that separation.”
Intel reported earnings and revenue that fell in need of analysts' expectations in its quarterly report last month and in addition announced it will cut 15 percent of its workforce. After the report was released, the stock had its worst day in 50 years, falling to its lowest level in greater than a decade.
Nvidia makes just about all of its cutting-edge chips at TSMC, which can be a serious manufacturer for AMD, Apple, Amazon, Google and Broadcom. For years, there have been growing concerns that China could invade Taiwan, which might pose a large risk to the U.S. chip industry.
Nvidia CEO Jensen Huang spoke on the Goldman Sachs Communicopia conference on Wednesday and was asked in regards to the geopolitical risks surrounding Taiwan and his response to what he would do if something were to occur.
“In case we need to move from one factory to another, we are able to do so,” Huang said in an interview with Goldman Sachs CEO David Solomon: “We will not be able to achieve the same level of performance or the same costs, but we will be able to ensure supply.”
REGARD: Intel near lowest level since 2010
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