Intel thinks it deserves more government subsidies than its rivals

Recently, Intel CEO Pat Gelsinger graced the Aspen Security Forum of 2023, delivering a keynote address wherein he expounded upon the “American CHIPS Act” and pertinent national security concerns. Certain elements of his discourse have since ignited widespread deliberation and contention.

According to TomsHardware, Gelsinger postulates that Intel, by virtue of being an American enterprise, should be accorded a more substantial slice of the $52 billion “American CHIPS Act” as compared to rivals TSMC and Samsung. Gelsinger contends that despite the latter entities embarking on new factory establishments within the U.S., it isn’t justified for them to avail such extensive subsidies from the Act.

With escalating export regulations from the U.S., globally entrenched corporations like Intel, AMD, and Nvidia are confronting heightened complexities in their Chinese operations. Gelsinger underscores the need for the government to mollify these trade restrictions, primarily because:

Firstly, the Chinese market constitutes a substantial 25-30% of Intel’s revenue. The company’s expansive capacity augmentation endeavors are, to a significant extent, tailored to satiate the Chinese demand. Should trade constraints truncate Intel’s earnings in this domain, myriad projects would lose their raison d’être. The prevailing export restrictions seem to unduly target Intel’s undertakings, which is antithetical to American interests.

Secondly, Gelsinger believes the extant trade restrictions are not only excessive but also lack precision. The protracted entity list encompasses over a thousand firms, many of which are ostensibly unaffiliated with so-called national security issues. Gelsinger advocates for a relaxation of these constraints, redirecting focus onto the “undeniably crucial domains of national security.”

Lastly, Gelsinger underscores that Intel’s pivotal research and development endeavors are predominantly executed on American soil. While welcoming TSMC’s and Samsung’s factory establishments in the U.S., he notes a stark divergence in their modus operandi compared to Intel’s, asserting that the latter undoubtedly merits greater subsidies.

Given the plethora of semiconductor companies domiciled in the U.S., some boasting indigenous factories—such as Texas Instruments, Micron, and GlobalFoundries—it has been posited that Gelsinger’s perspective is myopically anchored in Intel’s interests, overlooking the pivotal roles played by American contemporaries in the semiconductor realm.