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Intel CEO Urges Lawmakers to ‘Not Waste This Crisis’ in Chip Push

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Intel CEO Urges Lawmakers to ‘Not Waste This Crisis’ in Chip Push
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(Bloomberg) -- Intel Corp. Chief Executive Officer Pat Gelsinger urged the U.S. and Europe to push ahead with efforts to bring back chip manufacturing, arguing that government funding is needed to address an overconcentration of production in Asia.

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Governments need to learn from the disruptions of the pandemic and consider the national-security implications of having about 80% of production in Asia, Gelsinger said in an interview with Bloomberg News Editor-in-Chief John Micklethwait at The Year Ahead conference. Gelsinger said he was optimistic that the U.S. and European Union will push forward with proposed government funding to support the building of plants.

“Let’s not waste this crisis,” he said. “It’s good economics, but it’s also national security.”

A chip shortage has ravaged a wide range of industries in the past year, hurting sales of everything from cars to iPhones. That’s put a spotlight on the lack of production outside of Asia. Increasing tensions with China also have added pressure on U.S. lawmakers to restore local manufacturing.

Gelsinger, 60, said he will soon announce expansion plans for Intel’s manufacturing in the U.S. and Europe. Bloomberg has reported that the chipmaker is planning to build a production base in Germany and other facilities in Italy and France. Its next domestic factory will be in the Columbus, Ohio, area, according to Cleveland.com.

Last month, executives from more than 50 U.S. companies called on congressional leaders to pass legislation that provides $52 billion in grants and incentives for domestic chip production, as well as a separate bill to encourage semiconductor design and manufacturing. But the legislation has been slow to move forward.

The funding plan, called the CHIPS Act, was included in a large package of legislation aimed at countering China that was passed by the Senate in June. It later stalled in the House.

Intel has its own complicated relationship with China. It sells processors to companies in the country and recently proposed using a factory in Chengdu, China, to step up production of silicon wafers. The Biden administration blocked that plan.

Gelsinger said Wednesday that as long as Intel continues to produce the best-performing processors, Chinese customers will still want its products.

(Updates with Intel plan for new plants in fifth paragraph.)

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