Gelsinger sees a need for "clear industrial policy" in the U.S.
Good morning.
“Our competition is out to eat our lunch. And if we don’t fight for it every single frickin’ day, we are at risk of losing it.”
That’s Intel CEO Pat Gelsinger speaking to Ellen McGirt and me for this week’s episode of our Leadership Next podcast. Gelsinger came to Intel after eight years as CEO of VMware. But his roots at Intel run deep. A Pennsylvania farm boy, he joined the Santa Clara chip company at the age of 18, worked there while earning his college and graduate degrees, and mentored under the legendary Andy Grove. His goal as CEO is to recreate a “Grove-ian” culture: “Disciplined decision making. Blunt, data-rich conversations. Tough, aggressive engineering.”
But with this twist: he’s also looking for a multi-billion handout from the government, to help build semiconductor manufacturing in the U.S. “I’m a free marketeer to the core,” he insists. But he notes the U.S. share of semiconductor manufacturing capacity has dropped from 37% in 1990, to 12% now, with Asia making up the difference. “The lack of clear industrial policy here has led to an outcome that is precarious for our security, for our infrastructure, and for our long-term competitiveness.”
For the last half century, the U.S. has had an aversion to industrial policy, and its occasional nods in that direction have led to notable mistakes—remember Solyndra? But funding U.S. manufacturing of semiconductors has become one of the only issues that can win bipartisan support in Congress. The reason? China—and its insistence on sovereignty over Taiwan, which is the dominant player in the chip market. As a result, Gelsinger is likely to get his handout. Reinvigorating Intel’s culture may prove the harder part of the task.
You can listen to the podcast on Apple and Spotify. And I’ll be asking Commerce Secretary Gina Raimondo about the wisdom of the $50 billion semiconductor subsidy program later today at the opening of the Fortune Global Forum. News from the forum in this space tomorrow.
Alan Murray
@alansmurray
alan.murray@fortune.com
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This edition of CEO Daily was edited by David Meyer.
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