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Transcript: The Path Forward: Digital Innovation with Intel CEO Pat Gelsinger

MS. ZAKRZEWSKI: Hello, and welcome to Washington Post Live. I’m Cat Zakrzewski, a tech policy reporter here at The Washington Post.

Today we're going to examine a key component of the global economy, the semiconductor industry. I'm joined today by Intel CEO Pat Gelsinger.

Welcome to Washington Post Live, Pat.

MR. GELSINGER: Great to be with you, Cat, and thanks to join you and your audience today.

MS. ZAKRZEWSKI: Well, thanks so much for being here, and we're going to get to an announcement that you made yesterday about an expansion of AI degree programs at 18 community colleges.

But I wanted to start with a major issue in your industry. The world is facing a critical shortage of computer chips, and you've said that the shortage is likely to last beyond next year into 2023. What steps is Intel taking right now to catch up with demand?

MR. GELSINGER: Yeah. It's a great question, Cat, and just overall, as the world is going more digital, right, we were already, I think, probably going to be a little bit short. But then COVID--just the world just accelerated, and literally, the semiconductor industry went from 5-ish percent growth rate to 20 percent growth rate at the same time the supply chains were disrupted and probably went negative for most of last year. So, all of a sudden, you see this enormous gap in supply and demand and now seeing automakers, manufacturing lines stopped, and medical makers stopped, and PCs and clouds and shortage as we need more digital, and so I'll just say we and the rest of the industry are pouring into this as rapidly as possible to build factories, to squeeze the productivity of them, work with our substrate, in particular, one of the key shortage in the material supply chain to get back the balance as quickly as possible.

But the bad news is if we're going to build a new factory, it takes two to three years to have it online, and a major new modern fab is almost four years. So, boy, you know, we hit the ground running as of nine months ago, but we still have a long way to go until we get back to supply-demand balance. I believe that the second half of this year will be probably the bottom, the worst, but I think we're going to be still dealing with shortages until we get to some reasonable supply-demand balance through next year.

And we are leaning into this as hard as possible. I am pressing my construction teams and fab teams, fabrication, our manufacturer facilities to go faster and produce more as quickly as possible, help our customers modernize their design, so from some of these old nodes that are somewhat out of date and bring them forward to modern nodes, but starting a new design and requalifying, it takes time as well. So, unfortunately, there's no quick fixes to the shortage.

MS. ZAKRZEWSKI: And, on that point, you mentioned we haven't reached the bottom yet, but we're already seeing this have wide-ranging effects on everything from automobiles to even dog-washing businesses. I mean, where are some of the areas that you think consumers are going to feel this shortage moving forward.

MR. GELSINGER: Well, I think, clearly, the auto industry has been sort of the point of the arrow, and most auto companies--and I was just on the phone with one of the major CEOs this morning--when we hit COVID, they stopped, and so all of their supply chains stopped, including semiconductors. And then they came roaring back very quickly and strong, and this disrupted the supply chains quite significantly.

So I think auto is near the top of that list, but we now see it across everything, right, industrials, because you can't say, boy, I'm going to do wafers just for auto. We have shortages in WiFi chips to build laptops, and we have shortages in memory chips for cloud and server opportunities. We have power controllers that are limited, affecting many of the industrial industries, so quite widespread. This is largely the fabrication facilities or general purpose across them. It isn't like I can fix one and not affect the others. Everything is being impacted by what we said, you know, a major gap in supply as the world is becoming much more digital on a very rapid pace.

MS. ZAKRZEWSKI: And you mentioned the impact that COVID had, and obviously, the pandemic is dragging on. We're seeing this surge of the delta variant here in the United States. How are you thinking about shoring up your supply chain to avoid some of the issues that you had in 2020?

MR. GELSINGER: Yeah, a very good and important question, Cat, because one of the things, you know, as I've come back to be the CEO of Intel now for the last five months, that we need a more resilient but also globally balanced supply chain. And, if we were sitting here in 1990, the U.S. would be building 37 percent of the world's semiconductors. Europe would be building 44 percent and Asia the remainder. Well, now it's 12 percent in the U.S., 9 percent in Europe, and almost 80 percent in Asia. We've become too concentrated, and the world was focused on cost of supply chain as opposed to resilience of supply chain. And this has been the case across many industries, PPE, vaccines. We've seen this in many industries where, all of a sudden, everybody is waking up and realizing resilience of supply chains is way more important, and we somehow got lulled into sleep over the last decade.

So, as we're coming out of this, we're saying we're going to build back better. We are going to build back on U.S. and European soil so that we have a more globally balanced supply chain, and I've said a moon shot for the administrators and Washington as well as those in Europe would be that we go from 12 to 30 percent in the U.S., that Europe goes from 9 to 20 percent in the next decade or so. If we were sitting here 10 years from now and we were 30 percent, 20 percent, and 50 percent across U.S., Europe, and Asia, I think all of us would feel very good, and in particular, we've been very encouraged both by European efforts and some that they're taking, but very particularly with the CHIPS Act here in the U.S. that passed through Senate and is now in the House. And we're just telling all of the congressional leaders, go fast, let's get this into law, because I want to build factories lot faster than we can today, and that assistance will make a big part in accelerating our industry to build back but to build back better.

MS. ZAKRZEWSKI: You bring up that funding that passed the Senate to support chip manufacturing. What is the status of your conversations right now with House lawmakers on that legislation?

MR. GELSINGER: It's very encouraging in many regards that there's good bipartisan, bicameral support for it, and obviously, with the infrastructure bill and many other things facing Congress, we are just being very, very aggressive with the congressional leaders. We need to move quickly.

And I think there's pretty general belief that over the next couple of months, this should pass into law and be signed, good support across, and I'm just here saying let's go faster to get that completed. There are clearly questions--this is in the House--you know, areas like how will this work with the NSF and how will different requirements work with regard to funding and different portions of the House who are looking at different aspects of the infrastructure bill as well, so some of that normal sausage making that occurs, but overall, we're very encouraged. We simply say let's go faster to get this into law because I want to build factories faster than I can today.

MS. ZAKRZEWSKI: And so, yeah, can you tell me a little bit more about the stakes here? I mean, what would happen to Intel and other U.S. chip makers if Congress doesn't pass this legislation?

MR. GELSINGER: Yeah. And, you know, clearly, as we look at it, you know, we have a tremendous amount of data, that if I built a factory in Asia, it would be about 30 percent less than building it in the U.S. If I built it in China, I'd be 50 percent less, and a new factory for semiconductors is 10- to $15 billion. So, if I'm going to see offsets for 30 to 50 percent of that, economically, that's why the factories have moved to Asia. They're simply much more cost effective, and we want to build them on U.S. soil and European soil with U.S. IP, that we really own that foundational element of the technology industry.

As I would say, it's not like the U.S. or Europe said we don't want semiconductors in the U.S. It's that the Asians said we do want them in Asia, and they've put strong incentives in place to really underscore, make those industries much more competitive being built in Asia.

So we view this path from 39 to 12 percent, of 44 to 9 percent as really the collapse of U.S. manufacturing, and Intel is one of the few remaining companies who are manufacturing at scale in the U.S., and if the only way I can economically do that is to move our factories there, well, that's what we'll have to do to compete. But it's absolutely not what we want to occur. This is so important for the entire technology industry, for the U.S. economy, and for U.S. national security.

Cat, name one thing that's going on in life today that isn't becoming more digital. This is foundational to every aspect of humanity, and we're going to be dependent on a very small number of factories that are controlled in Asia? That's just not right for humanity. It's not right for our nation, and that's why we're so passionate on this particular topic, that we want to build this in the U.S., create a globally balanced supply chain, ensure our national economy and our national security as well.

MS. ZAKRZEWSKI: And on that point about competition, I mean, Samsung, TSMC, these major manufacturers, they're ahead of Intel right now when it comes to the types of chip technology that they're making. What's your plan to catch up?

MR. GELSINGER: Yeah. Thank you. And we--you know, Intel stumbled. I've come in, in part, in response to some of those stumbles, and we've laid out a course to resume competitive parity and leadership. We just described that in great detail last week, and we're managing that very closely, and we are now on the path to close those gaps and resume competitive leadership in the next couple of years.

We at Intel, we've done all of the major transistor innovations of the last 25 years. We just laid out a path for the next major transistor innovation, which we'll be introducing in 2024 with a large buildup of capacity. So we believe we are quickly righting the ship, also then building the best products on those capabilities to resume our competitiveness across state assenter and client, but we have many areas of leadership that we've never stumbled in. And our packaging technologies in particular have been some where we are the leader in the world today, and as we put that together with resuming process, we're confident that we are back on the track and that the capabilities that we're suggesting be built out. And, as I've said earlier in the year, I want to build my next major mega-fab location and announce that in the U.S. before the end of the year, that that will be the most leading technology, the most refined and capable manufacturing capacity, all in the U.S., with U.S. intellectual property. This is just the right thing for us as a company and us as a nation.

MS. ZAKRZEWSKI: And what locations are you currently considering for that facility?

MR. GELSINGER: Yeah. We're looking broadly across the U.S. We're saying come one, come all for proposals. This would be a very large site, so six to eight fab modules, and at each of those fab modules, between 10- and $15 billion. It's a project over the next decade on the order of $100 billion of capital, 10,000 direct jobs. 100,000 jobs are created as a result of those 10,000, by our experience. So, essentially, we want to build a little city.

We're engaging with a number of states across the United States today who are giving us proposals for site locations, energy, water, environmentals, near universities, skill capacity, and I expect to make an announcement about that location before the end of this year.

MS. ZAKRZEWSKI: Got it. And, yeah, it sounds a lot like Intel's version of the Amazon HQ2 contest in a lot of ways.


MR. GELSINGER: A little bit so. You know, here, though, I think the aspects of--you know, as we've--you know, our sites in Oregon and in Arizona. We have large sites in Ireland and Israel as well. These become hubs for those entire communities, and we've seen in all of our locations, it brings suppliers. Other companies come into it. You know, university, community college, training programs, the need for schools, restaurants, et cetera, these are really just such spectacular projects, and if you go to those communities, it's been just entirely transformational for them. And that's what we want to do. We want to build that kind of capability to even expand even further on U.S. soil.

MS. ZAKRZEWSKI: And you just mentioned community colleges, and I want to take some time to talk about your big announcement from yesterday. You said that you're launching an Intel AI workforce program at 18 community colleges across the United States. So can you tell us a little bit about how that program is going to work?

MR. GELSINGER: Yeah, yeah. And, you know, we are excited because, you know, not everybody is going to be PhD, but everybody--you know, as I would say in the past, it was read, write, and arithmetic. In the future, it's read, write code, and arithmetic as the three, and, you know, with the--you know, and I personally--you know, I'm a farm boy from Pennsylvania, sort of stumbled into technology, went to community college, and really just the great American Cinderella story, so it's something close to my personal heart as well, that, you know, many bright, capable--you know, they don't have the opportunity to be MIT or Stanford entry. But beginning the basic skills around AI--and we view AI as one of the super powers of technology that takes vast computing and data and creates intelligence from it, and the skill of being able to use AI is one that we think will be foundational to almost every industry category going forward, where if you go to a doctor in the future and they are not using AI-assisted radiology, leave. It's becoming part of the cyber infrastructure, part of the capabilities on retail, all the things that we're doing for automation and manufacturing, so very foundational skills.

So what this is is building these programs with 18 community colleges, and we're building on a success model that we already had in place to start this AI program that enable us to have this workforce development with the basics of AI. We do believe that it becomes basic for everybody, but we also expect that this will be some of the Pat Gelsingers of the future, that this will be the starting point, and they go on to university and that they progress with their career and their employers. So we view it as something just foundational for the workforce for the future but also enabling people to enter.

And, in the community college, you know, they just have such great, great, you know, indication--you know, typically, you know, far more Blacks, far more underrepresented minorities, far more of the lower strata. You know, this is the only path they have to really enter the high-tech and the high-skilled workforce.

So we're quite excited about the program. AI couldn't be more foundational, and we do hope that sometime soon, Cat, we're on a conversation where we're saying, okay, we've launched our next 50, next 100 community colleges.

MS. ZAKRZEWSKI: And do you at Intel plan to hire graduates of these programs?

MR. GELSINGER: Oh, absolutely, absolutely, and not only do we plan to hire, but we plan to shove some of our workers into these programs as well to help upskill them as well, and we do in so many respects. And I think, you know, much has been said about the cost of higher education and the debt burdens that come out of higher educations. We think programs like this are ways for businesses to say, oh, I'm going to start putting some of my workers through these programs so that I'm essentially enabling them to move into the next strata of our workforce as well as reaching back into the pipeline and saying, boy, let's start scholarshipping. These aren't that expensive a programs, and then let's accelerate the hiring programs for internships, other programs like that, that we see that both are a major cost offset but also an accelerant.

As I say, you know, I love interns, and, you know, you work them like crazy and you hire all the good ones because they already know the company and you already know them, and so many good efficiencies in hiring, training, workforce, upskilling. Every aspect of this is just delightful when you click into the numbers more carefully, and the fact that it reaches communities that are well underrepresented with university, underrepresented minorities, Black communities, it is really thrilling when you look at the statistics behind this, a few things that you could do that would be a better type of program and to do it around AI, such an exciting technology domain. This is almost as good as it gets.

MS. ZAKRZEWSKI: So how is the lack of existing AI training in the American education system--how is that currently affecting Intel?

MR. GELSINGER: You know, we--you know, as I say inside of the company, Cat, that we believe that we need to bring AI to every aspect of our business, right, and as we think about AI, you know, should I be using the most advanced AI to help us predict wafer yields? Absolutely. Should I use it to help me do more intelligent pricing? Absolutely. Should I be using it to help me manage my supply chain introspections more effectively? Absolutely. Should I be building more capabilities so that the PCs that we build become more AI intuitive for voice prediction, you know, and maybe voice becomes a way to make it more accessible for disabilities? Well, absolutely. Should we be building more capabilities into our cloud offerings so that we're able to do more model training for medical fields or for our autonomous driving? You know, and just going through a few of those examples, you see that it's affecting not just how we work but also every aspect of the products that we build, and we see this across essentially every industry. Which industries should be using AI to do better customer support or to do better targeted supply chain and advertising? It's literally across everything that we do that we see the intelligence of AI becoming meaningful.

And programs like the one that we just announced yesterday are essentially helping people to become both experts in AI but also practitioners in the use of AI, and these two aspects, I think, really say it really is AI for everyone.

MS. ZAKRZEWSKI: And speaking of how AI affects every company, I want to switch gears to another issue that's affecting every business, which is obviously COVID, and looking back on the past year and a half, I mean, what have been the biggest lessons for you as a CEO?

MR. GELSINGER: Well, it was very interesting. I became the CEO of Intel five months ago. I had to step into my job, not being able to meet my team, except virtually, as we're doing today.

We had our first executive meeting about two months ago, so I'm now maybe three months into my tenure as CEO. And I walked into the room, and I looked at two of my staff members that I never met in person before, and I says, "Huh, you're shorter than I thought you were."


MR. GELSINGER: You know, and all of a sudden, you're just like, you know--I mean, this is fabulous, but it's not the same as having been in a relationship.

And I think of the virtual environment because our teams and our organizations have been extraordinarily effective working virtually. I mean, this is the biggest migration of the human workforce in history in such a short period of time, and everything sort of worked, right? We're able to keep that idea of hybrid work or, as we would say, you know, we now all live that work, in that sense, and amazing how well it's done.

But it also means there's no boundaries to the day anymore. I don't drive to work or leave from work. It just sort of starts when I have my six-step commute from my bedroom to my office, and you're into work. And it pervades the nights, the mornings, the weekends, remote teams everywhere. You're struggling to build relationships, to maintain culture.

Through the pandemic, we've hired 10,000 people at the company. Wow, they've never actually touched one of our facilities or been able to meet with their managers. It's an extraordinary thing to be able to address that. We're seeing levels of worker fatigue because you now just have this, you know, days don't end or begin. They're this continuum of work, and I'll say many of the disciplines.

And I've written on the subject of balancing faith, family, work, and those disciplines of how you draw the lines between my work, life, and family become even more important in COVID, the mental health and wellness of our team, but also many good things. Hybrid work, right? I don't care where you live, Cat. You could be part of my team now, right? I don't need you to move from taking care of your mother in some part of the U.S. where I would never have a site to now I'm just fine with you being close to your mom and being at that site. I just need to show up at our campuses for team-building events or for innovations, sprints that we might have going forward. So there's many aspects of this that are just changing the workforce in a very good way, but you also have to be very thoughtful about some of the things that you're giving up and how you make up for those in this COVID, and that I'll say, you know, we believe that most companies will end up primarily as hybrid workforces moving forward.

MS. ZAKRZEWSKI: Yes. And that hybrid work experience, obviously, you and I have been able to have isn't something, though, that all workers in the U.S. have been able to enjoy, and there have been a lot of--there are a lot of Intel workplaces, factories, for instance, where employees do need to physically be there to get their jobs done. So what precautions are you taking, and how are you thinking about that moving forward?

MR. GELSINGER: Yeah. You know, we're been just extraordinary. The factories and, you know, as I would say, the labs and the fabs, where people have to touch physical things, right? I need them there, right? You know, you can't live remotely. You got to be in the fab, right, to be running the factory.

And if you go into one of our fabs, you are in, like, the most hermetically sealed, safe airflow, clean, bunny suits, et cetera. So you're like ultrasafe. We already have all these cleaning procedures in place. So, in many regards, we're like the easiest industry to deal with COVID because everybody has to go through it.

Of course, we had to take extra precautions, manage that thoughtfully, but in so many respects, this was relatively easy because we're already such a high-tech, extreme, clean-room environment that everybody is already working in.

So we have about 35 percent of our 114,000 employees that have never stopped right through COVID, again, special precautions in how we've managed through that, and as we look forward and now that it's really having to do more of the 65 percent, how do they come back to a new model and a hybrid model of work into the future? I think it's just the resilience of the workforces that we've seen in our employees. They are the true heroes of COVID for us.

MS. ZAKRZEWSKI: Definitely. And we only have a few minutes left. So I wanted to just ask you a final question about your personal journey. What's it like coming back to be CEO of a company that you had already spent three decades with?

MR. GELSINGER: Yeah. Thirty years and then I call my 11-year vacation, which I just recently read the Isaacson book on Steve Jobs, and it was 11 years that Steve was out of Apple. I though, oh, 11 years? It must be something magic about that, and I've also called it sort of the death of a vision because I wanted to be the CEO of Intel. I had written that almost 30 years ago on my mission statement, and then leaving, it was sort of like in the first couple of years, you're like, oh, you know, just the angst of it and so on, why did it work out this way, and then being able to come back now to my dream job.

But being gone long enough also to gain an independent perspective. I'm not a rookie CEO any longer. I've learned and developed a real view of how to work and partner with the board of directors, different perspectives about software and AI and its critical role into the industry. So I bring back to the job a lot of skills that I would have never gotten had I continued to be in the role. So it's sort of like, okay, God, I don't know why I need to be gone for 11 years, but now that I'm back, I see that every experience of my entire career and the 11-year vacation is now being fully utilized.

I joke that I said if you would do an MRI of my brain at the end of any week, every neuron has fire, right? There's no experience that isn't being utilized, and we're making extremely rapid pace to bring this iconic Intel, one of the most important companies for America, the company that put "Silicon" into Silicon Valley, and that company is now my honor, my joy, and to recognize the founders, Grove, Noyce, and Moore, some of the most iconic people of the industry, the role that it plays in technology and the criticality of it for the nation. I get the honor of leading that company in this journey. Yeah, this is pretty thrilling for me.

MS. ZAKRZEWSKI: And, obviously, Intel has changed so much, and you're coming back in a pandemic, but what's still the same?

MR. GELSINGER: You know, there are many--you know, this place is littered with talent. We have more PhD's, more patent, more innovators, just everywhere, and now it's how do we harness that and bring that forward? And that was always one of the hallmarks of Intel.

I was just with a customer yesterday, and he says, "You're a real engineering company." It's like, yeah, that's right. That's who we are, you know, that depth of deep technology. We bend physics. As I said, Moore's law, this view of semiconductors continuing to increase, we're not finished until we've exhausted the periodic table. We're a curious bunch that are seeking to find every aspect of what God has placed in the materials of life. We're the ones that are going to exploit them better than any other, and that deep passion is what drives us as a company to be that relentless innovator and then to use that technology as, what I like to say, we're shaping it as a force for good. Technology is neutral, but can we be the company that's constantly bending it toward good?

And then, finally, that we could touch the lives of every person on the planet. Every human is improved by our technologies. That's who we are, but we also needed to modernize the company. It's a more diverse period, you know, millennials and new work. They have different expectations of what it's like to be part of it for a company like ours, but as I would say, many things that were old are new again. But we also got to adjust and make it a company that everybody says, hey, I'm going to do the coolest work of my life working with the smartest people on earth to change the life of every person on the planet. We want you here. This is part of the company that we want you to be in.

MS. ZAKRZEWSKI: Well, unfortunately, we're out of time, so we'll have to leave it there. Thank you so much for joining us, Pat Gelsinger, CEO of Intel.

MR. GELSINGER: Thank you so much, Cat, and for everybody listening.

MS. ZAKRZEWSKI: I’m Cat Zakrzewski. As always, thanks for watching. To check out what interviews we have coming up, please head to to register and find out more information about all our upcoming programs.

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