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Transcript: The Path Forward: American Competitiveness with Pat Gelsinger, CEO, Intel

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MR. IGNATIUS: Welcome to Washington Post Live. I’m David Ignatius, a columnist for the Post.

Today I'm joined by Pat Gelsinger, the chief executive of Intel, America's largest chip maker. We're going to be talking about computer chips and about a high‑voltage, increasingly high‑wire effort by Congress to pass significant new legislation to support that industry.

Pat Gelsinger, welcome to Washington Post Live.

MR. GELSINGER: Hey, David. Great to be with you today, and it was great seeing you at Sun Valley last week. So, you know, what a pleasure to be able to follow up again with you today. Thank you so much for letting me join you all.

MR. IGNATIUS: Well, it's great to have you.

Pat, if you would begin just by giving our audience a brief 30‑second explanation of what these computer chips are and why they're so important for our national security, for American industry, and our competitiveness.

MR. GELSINGER: Yeah. You know, semiconductor is a 50‑year‑old, now, industry, $600 billion invented on American soil, a lot of DARPA and AT&T, you know, and now this industry is now pervading everything. As I say, you know, computing, connectivity, infrastructure, you know, AI is permeating every aspect of human existence, and I would just ask any of the listeners, what aspect of your life is not becoming more digital? Work from home, education from home, remote health care, our social experience, our cars becoming autonomous and electric, every aspect of home electronics. You know, my thermostat now has a sophisticated computer in it. Everything is becoming digital, and everything digital runs on semiconductors.

So, essentially, as I've said, you know, where the fabs are for the next several decades is more important than where the oil reserves have been for the last several decades in defining geopolitics, economic, and national security. It's that important to our future.

MR. IGNATIUS: So let's turn now, Pat, to the saga of the CHIPS Act, as it's called. This bill has a number of different names, but essentially, it would provide $52 billion in support for your industry. Explain what difference that would make to your industry, your company, in terms of your ability to compete.

MR. GELSINGER: Yeah. Thank you, David. And, you know, if we were here in 1990, we would have about 40 percent of this industry on American soil, you know, similar numbers on European soil, so 80 percent of the world's supply in U.S. and Europe and about 20 percent in Asia. Fast forward to today, we now have 80 percent of this industry in Asia and just 12 percent in the U.S. and just 8 percent in Europe.

When did we vote to move this industry off our shores? That vote never happened. The votes that did happen were in Taiwan, Korea, China, where they put in place enormous incentive programs, industrial policy to attract this industry into Asia, and now we're acutely dependent on very few areas in the world for something that is essential to every aspect of human existence, our economy, our national security.

And the chips period, as we went through the COVID, where we saw this spike in demand, all of a sudden, this huge dependency became transparent to everybody in the world, and if I was building a new fab in Asia, you know‑‑and a new fab module is about a $10 billion investment per fab module, you know, enormous capital investment‑‑it's about 30 to 40 percent cheaper to do it in Asia. Strong incentives, ecosystem, and other factors are associated with it, but by far, the biggest is the capital incentives that are in place in those Asian companies‑‑countries.

And what the CHIPS Act does, it levels the playing field. It simply gives us the incentives to build those factories in the U.S. that, you know, has us competitive. If you're going to put that kind of capital to work, you have to be competitive in the global market with it. So the CHIPS Act creates capital incentives. You know, for every dollar that they put in, there's at least three dollars that are unleashed. So it requires multiplicative impact and a number of long‑term research initiatives as well to keep us ahead in this industry for decades to come, about $40 billion in capital incentives, about $12 billion in research and R&D, and to me, it really is this fundamental shift that the U.S. goes from declining to flattening and starting to rise again.

The moon shot I've suggested, David, you know, by the end of the decade, that we're 50‑50, you know, that we've gone from 80‑20, 20‑80, to 50‑50 by the end of the decade, and the CHIPS Act is this critical moment that allows us to turn the tide of investment and rebuilding this industry on American soil.

MR. IGNATIUS: So let me just explain to viewers how this got snarled up politically. More than two years ago, a bipartisan group of senators put this proposal together. The bill passed the Senate in June of last year. It passed a different version, passed the House, I think, in February of this year. A conference began in April, and here we are in July, and the bill still hasn't been passed.

You have been monitoring this with intense interest and sometimes frustration. Tell our viewers where things stand right now, as of today, in terms of getting this darn thing passed.

MR. GELSINGER: Yeah. And I've only talked to three senators today, so it's a busy morning already, and with Congress coming back, you know, an important lunch, right, you know, with McConnell and this‑‑you know, Republican senators coming up today. So, you know, we are at game time on this right now, and today where it is is USICA, the Senate version, right, COMPETES, the House version that's been passed. We've been going through this conference process, as you mentioned, David, and, you know, we are now down to sausage making where most of the periphery, you know, the ornaments have been moved away. And we now have a version of the bill that largely has passed this conference process.

But, unfortunately, McConnell has taken a strong view that, hey, I'm not going to let that move forward if the reconciliation bill continues to be pushed forward by Democrats. So it's become a bit of a political football, and we've made super clear to McConnell, to the Democrats, to the Republicans that if this doesn't pass, I will change my plans.

You know, the Europeans have moved forward very aggressively, and they're ready to give us the incentives that allow us to move forward, you know, without limitations, putting euros in our bank. And I think it's embarrassing that the U.S. has started this process a full year before the Europeans, and the complex, you know 27‑member state, Europeans, have moved forward more rapidly. It's just implausible, but we're caught in this political sausage‑making process right now, David, that has it tied up really somewhat as a political football because there is good support, Republicans, Democrats, bicameral, that CHIPS needs to get done. It is economic and national security imperative, but we're stuck in a complex political process. And, you know, this is where, hey, I need help from this audience. We need this done now.

MR. IGNATIUS: You said at the Aspen Ideas Festival just a couple weeks ago, "Please don't dither in Congress over petty partisanship," but as you say, that's exactly what's happening.


MR. IGNATIUS: I'm just curious about the pressure that you and other industry leaders who care deeply about this can bring. I'll just quote for our viewers, the tweet from Senator Minority Leader McConnell: "Let me be perfectly clear. There will be no bipartisan USICA"‑‑that's the Senate name for this chips bill‑‑"as long as Democrats are pursuing a partisan reconciliation bill." In other words, it is, as you said, very much tied up in political bickering. How do you break through that if you're somebody like you who cares about the bill?

MR. GELSINGER: Yeah. And, you know, we're working hard, and I just got off the phone with Senator Portman, and obviously, we're, you know, building a big plant in Ohio. So he's one of my key leaders on this. Senator Young and Senator Schumer‑‑you know, unfortunately, Senator Schumer came down with COVID, so he's‑‑you know, I'll say he's working the phone lines aggressively on our behalf. They were the original sponsors of the bill, you know, and we are, I'll say, really doing two things. One is we are emphasizing that there are real‑time consequences of this doesn't pass. I know I will make a decision to delay our project in Ohio if it doesn't pass. We're going to go forward in Ohio. As I said, the speed and the size is dependent on U.S. industrial policy to make this happen, and that's embodied in the CHIPS Act.

But I firmly believe and having talked to CEOs and many of the other semiconductor leaders in the company, you know, that our two fabs, but at least three other fabs are dependent on this getting across the line. So do we want five fabs built in the U.S. getting underway this year, or do we just want everything being pushed out to either Europe or Asia and further delayed? So we are emphasizing the urgency that this must pass right now. It has meaningful consequences economically.

We're also bringing our national security allies in very aggressively, also industries like the auto industry, Jim Farley, Mary Barra, you know, emphasizing to their congressional leaders. You know, I've even asked Mary. I said, "Hey, every Kentucky car distributor needs to be calling McConnell's office today to emphasize that this cannot be a partisan football." So we need to bring political pressure, but we also have to realize, hey, you know, compromises. We're ready to negotiate. We're working. And that was a lot of my conversation with Senator Portman just now is what are the options. You know, how can we create a skinny bill that has less issues and good bipartisan, bicameral support?

MR. IGNATIUS: And, Pat, what would you say? You're obviously intimately involved in this process. If I had to ask you to make a bet as to whether this bill will pass, skinny version or whatever version, this month, because it's got to be done this month or it won't happen this year, what would your answer be?

MR. GELSINGER: You know, I'm an optimist by heart. I find it easier to live that way, David. So, you know, I believe at the end of the day, you know, we'll‑‑you know, I'm greater than 50 percent that it will get done in August, but, you know, I hear many others that say, well, there's still a lot of risk here, Pat, to getting this done. And so I'm an optimist. I believe that‑‑you know, as one political comment was, you know, our democracy works, but all other options have been exhausted, and I do believe that that may just be the case here, you know, that, hey, we're going to‑‑made it painful, we're going to have gone to the last second, but, you know, we are telling every one of our congressional conversations, do not leave for August recess without this being done.

MR. IGNATIUS: So just to pull the camera back a bit, this bill is called in the House, the "America COMPETES bill," and I wrote recently that a better name for it, for the process that we're watching is "Why America Doesn't Compete" because we seem unable to get this done. It's been‑‑it's been more than a year since this was passed‑‑


MR. IGNATIUS: ‑‑by a bipartisan majority in the Senate. Let me just ask you as somebody who knows the country, our system well. What's going on here? Why are we unable to do something that there seems to be consensus bipartisan support for?

MR. GELSINGER: Yeah. You know, I think, you know, my‑‑I've somewhat thought through that question also in the context of why the Europeans could start a year later than us and now be ahead of us. You know, literally, our proposal for our German fab is now being reviewed for approval by the European competition community. Essentially, you know, the ones who would be responsible for that in the U.S. would be the Commerce Department, you know, with Secretary Raimondo.

We're now in the final stages of approval in Europe, and I say why has that gone so well, right, when this has gone so hard in the U.S.? And, fundamentally, I think that the U.S. decided that industrial policy is bad, and where exactly that emerged and how that's emerged over decades now, that, you know, being involved in deciding where we want industries, do we want manufacturing on American shore, you know, what do we care about for the long‑term success of the nation, that it's no longer appropriate for us, that we're going to be solely allowing that to free market behavior.

You know, and I'm a free marketer, and I'm, you know‑‑let's compete in the global market‑‑you know, a globalist, but fundamentally, when for three decades we've seen nations‑‑and this is number, you know, in the top five of China's last five‑‑‑five-year plan. So for two and a half decades, this has been‑‑the semiconductor industry has been on the top of their list. Taiwan has had industrial policy in place. Korea, you know, Japan, in these areas for decades. And we've just said let free market reign. Well, you know, when they're putting 30, 40, 50 percent incentives for these massive capital investments, free market leads to 80 percent shift into Asia. It's a very natural outcome, and we've seen our supply chains where cost, you know, Wall Street‑driven cost estimates are the only thing that matters. So we've gone to just in time, minimize cost post‑COVID. We have to go to resilient just in case. Just in time to just in case.

And I think our version to any form of industrial policy has created a backdrop that makes it so politically hard to get anything done versus Europe where, you know, they're very oriented with this idea of industrial policy, that we must be taking steps for the outlook for our national interests for the long term, and so much of that is embedded in key technologies and key industries for the future.

MR. IGNATIUS: And just to ask the skeptical question that I'm sure some of our viewers have, why should our American taxpayers support an industry that's already very profitable? Understanding what you say about the competitive challenges, you're still in business on behalf of your stockholders, and you're doing pretty well by them. Folks would ask, why should we help you out? And more to the point, I guess, what guardrails would you have in place to make sure that the money that you're receiving doesn't end up going to support stock buybacks or things that‑‑


MR. IGNATIUS: ‑‑make some rich folks even richer?

MR. GELSINGER: [Laughs] Yeah. Well, you know, one thing I'm happy to say is when I showed up as CEO, you know, I just thanked my predecessor for doing stock buybacks because he did enough that I'm never going to do any, so take that off the table.

You know, and we've also, right, you know, certainly speaking from the Intel lens‑‑you know, I've‑‑I took‑‑you know, went to Wall Street and said, "Hey, I'm taking the free cash flow of the company negative for the first time in over three decades." You know, we just put it on the table for us.

Now, those concerns, though, I think are very‑‑you know, very appropriate, and I do think there's some aspects of guardrails, you know, that, you know, clawbacks, other things, if, you know, the guardrails that are established for this are exercised properly. So, you know, we're not bothered by those discussions.

There's also questions of, you know, China competitiveness and export policies, you know, but the U.S. government has a lot of tools in these areas already, you know, and it's an incentive package. You want to create the motivation for companies like ours but also companies like TSMC, Samsung, SK Hynix, Micron, Texas Instrument. These companies invest more in the U.S.

You know, the fact that we've gone from almost 50 percent of this industry to 20, to 12 percent of this industry over 30 years, it's broken.

You know, when I had this conversation with EU Commissioner Margrethe Vestager, you know, she says, "Why should we get involved?" The same question, why should there be government subsidies? And she said, "We should only get involved where there's market failure," and I said, "Margrethe, Europe has gone from 44 percent to 8 percent and predicted to be less than 5 percent. If that's not market failure, please tell me what is." And I think against this, you have to say that, generally, you know, free market is the right policy. It is the power of our nation, but that is inadequate when major industrial effects across the world are not playing by the same rules.

You know, we need to be building our policies for the outcomes we desire, not just based on a simple policy view that, you know, was established for decades and was never really negotiated as a policy. You know, it was viewed as an essence of an open‑market consideration.

I do believe that, fundamentally, we have to say certain technologies, certain industries are critical to the nation's future, but furthermore, it's also critical for our national security, right? You know, hey, you know, how many F‑35s can we put in the air when we depend on foreign chips as well? This matters.

But, also, the economic implications of this, why did we let so many manufacturing industries, you know, the job creation‑‑you know, this is a great industry. We create wonderful jobs, you know, across the entire spectrum. You know, construction, you know, leaving construction, every job I put in place, our estimates show we create seven jobs in the communities that we're in. You know, we're not building a fab; we are building a small city, David, when we start these types of projects.

There is so much economic good, national security good, and long‑term policy good. That's why this deserves the support of the United States.

MR. IGNATIUS: In the spirit of self‑criticism and a frank discussion of this, I want to ask you about Intel itself. Intel was once the unrivaled, dominant force in your industry. It created the modern semiconductor industry, and even given what you say about subsidies from abroad, part of the story of America losing its lead goes to companies like Intel and the management that preceded you. I'm not asking you to second‑guess your predecessors beyond the basic question of whether Intel's management let some of that incredible advantage we had slip away. It wasn't just foreign subsidies. It was mistakes that were made at home.


MR. IGNATIUS: Am I right?

MR. GELSINGER: Absolutely. You know, and I'll have to say, you know, Intel, you know, lost its way, and we had nontechnical leadership of the most important technology company in America for a decade and a half. You know, some of that falls‑‑you know, the choices that were made, some of that clearly goes to the board of directors and the choices that they made. Some of it was, hey, we tried certain things. We stumbled and we failed on different programs as well. But the confluence of those board decisions, management decisions, technology, you know, stumble has taken one of the great technology icons of America and we're not leading anymore.

And part of my coming in was to turn the company around, and as I made the decision‑‑I had a great job as a CEO. We just had our great‑‑eighth grandchild. Life was good, and life was comfortable. And, David, when my wife and I made the decision to take this assignment on, we saw it as restoring Intel, the great technology icon, in honor of the founders.

You know, I grew up at the feet of Andy Grove, Gordon Moore, Robert Noyce, the icons of the semiconductor industry. I just named a site after Gordon Moore. We're soon going to name one after Andy Grove. We are going to honor our legacy and rebuild this icon.

But, second, we need to rebuild our supply chains. You know, clearly, COVID has shown that we became, you know, dependent on narrow, fragile supply chains. This is so important to the world. We need globally balanced, resilient supply chains.

And, third, we need to rebuild this technology underpinning for our great nation as well.

And that's why I've taken this job, and it is a big, tough assignment, but it is so critical for the future of the company, the technology industry and our nation, that, hey, I believe this is where God wants me, and this is the assignment I have today, to fix the stumbles that I will certainly admit. Yep, Intel had those, and it's now my job to restore this great company to the leadership position for our nation.

MR. IGNATIUS: I should just note for our viewers that Pat Gelsinger actually was, I believe, a chip designer. You didn't come in on the financial end of this business but on the technology side.

MR. GELSINGER: [Laughs] Yeah. In fact, the picture behind me here is the 80486. I'll just turn my camera slightly on the wall here. You know, that was my‑‑that was my, you know, Rembrandt, if you could, was my‑‑you know, I was the architect, designer of that. I did 14 generations of chips for Intel over my career here. You know, I helped to create USB and WiFi, so a technologist, but also a passionate, you know, member of the, you know, Intel legacy and somebody who deeply believes in the national priority that this has for us.

You know, I was with the company 30 years, as I say, took an 11‑year vacation. You know, it's almost to the day, David, how much time Steve Jobs was outside of Apple, and now I'm back to where I began. You know, I joke I started here at Intel so young, I went through puberty at Intel, you know, as a young technician as I grew through the company, and now it's an honor of a lifetime to lead this company at this most critical period in history.

MR. IGNATIUS: So this whole debate is about our competitiveness with China, and we have an interesting question from one of our viewers. Ahmet Altekin in Turkey asks, "Will international trade restrictions"‑‑and by that, I assume he means things like the entity list designation of Huawei‑‑

MR. GELSINGER: Mm‑hmm, mm‑hmm.

MR. IGNATIUS: ‑‑"really help the United States recover competitiveness, or is it just as ploy for creating a breathing space?" A good, good question, I think.


MR. IGNATIUS: Are we really going to succeed in this long‑run competition, or are we just going to get a little jolt of hormones that's not going to get us far enough?

MR. GELSINGER: Mm‑hmm. Yeah. You know, any technologist, you know, will clearly say there is no permanent advantage. The only permanent advantage is continual pace of innovation and staying ahead of competition. So, you know, the real answer to the question is how do you stay ahead, well, compete long term, right? You know, keep innovating, keep staying ahead over time.

Now, the way the bill is structured, it also complements a number of export policy issues, and the $52 billion bill, $12 billion is all about long‑term innovation establishing the National Semiconductor Technology Center for long‑term innovation, and I think that fundamentally is the critical aspect of the question. Compete, innovate, you know, be ahead for the long term.

You know, the capital incentives are, boy, we've been seeing this drift away. We have to reverse that trend, building factories, building capacity, having jobs in the U.S.

You know, but third is the export policy aspects, and I do believe this is a critical topic, and I've had numerous conversations, for instance, with the president's national security advisors on this topic, you know, and there are limitations on what technologies are available to China and what technologies aren't available to China to establish, I'll say, you know, sustainable gaps between where they are capable of and where we are capable of building. And I also believe those are appropriate, and they're going to certainly be debated, and our export policies become, you know, the combination, right, of technology limitations, but I'd also emphasize that we want to continue to have strong exports.

You know, we want every country in the world building on our technologies, and in fact, the more of our export they are using, the more empowering our export policies are. So it isn't to stop doing business in China. Quite the opposite, do more business in China, but carefully manage the technology flow to China consistent with our export policies, and we think that combination of things‑‑long‑term research, rebuild the manufacturing base, and carefully constructed export policies to maximize product but carefully control technology for, you know, export‑‑is the right combination.

MR. IGNATIUS: So we've talked, Pat, about financial capital and resources, haven't talked so much about human capital, and I need to ask you, frankly, whether you think the American semiconductor industry has the talent pool to be able to make this competitive leap forward or whether we need to think about changes in our immigration policies that allow more high‑quality engineers to come here from other countries. What do you think?

MR. GELSINGER: Yeah. You know, I think it really has to come to both of those, and the question on the first one is, you know, are we graduating the engineers? Are we making this an exciting domain for young talented individuals to enter into? And, you know, clearly, you know, since we've announced our Ohio project, for instance, the outpouring of interest, you know, from our top universities‑‑Arizona State, Ohio State University, Michigan, Michigan State, Purdue‑‑all of these, you know, they are excited to build the semiconductor manufacturing curriculum to build us that long‑term workforce. And there's elements in the bill specifically in those areas. You know, we have to be rebuilding those areas of our colleges, universities, also community colleges as well. So, clearly, that's a priority. We've committed funding to that. We've committed, for instance, in the Ohio project, $50 million of funding, which is complemented by $50 million from NSF funding specifically on talent development.

At the same time, you know, I do believe our immigration policies‑‑anybody who receives a master's or a Ph.D. from a U.S. school can get a green card stapled to it, right? We want the best talent in the world coming here, staying here, and, you know, some of the different versions of USICA and COMPETES, you know, in the House and the Senate version specifically, you know, also include provisions around immigration.

You know, I doubt that those will pass in this current form, given some of the earlier political comments, David, you know, but this is a hot button for me. You know, I want to have the best talent on the planet coming here, staying here, being trained here. We just have to make it much easier for that to be the case.

MR. IGNATIUS: So, Pat Gelsinger, the chief executive of Intel, thank you for a very frank and illuminating conversation about a big issue that's before the Congress and the country. Thanks for joining us.

MR. GELSINGER: Hey, thank you, David, and anytime, anyplace you want to chat on any subject, I'm in. Thank you so much.

MR. IGNATIUS: Great. Deal.

So thanks to all of you for joining Washington Post Live today. To check out what interviews we’ve got coming up, go to to register and get the information about our schedule and plans. We’ll look forward to seeing you soon. Thanks.

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