Source: U.S. Navy

At the Fortune Brainstorm Tech conference, Intel CEO Pat Gelsinger argued that the U.S. government should give more subsidies to American semiconductor firms, rather than handing them out to Intel’s Asian competitors. In the process Gelsinger also openly voiced his doubts toward Taiwan’s stability. Gelsinger’s action drew sharp responses from TSMC’s leadership, including CEO Mark Liu, and TSMC founder Morris Chang. 

While Gelsinger agreed that pending subsidy programs like “CHIPS for America Act” shouldn’t exclude Asian foundries like TSMC and Samsung, he contended that domestic companies such as Texas Instruments, Micron and Intel should be prioritized. Otherwise, the high subsidies received by Chinese, Taiwanese and South Korean semiconductor companies meant that American chip makers would be ultimately competing against countries, not companies.

♦ Further reading – PCB makers are the latest battlegrounds between TSMC and Intel 

No less important, the Intel chief believes that the United States should keep invaluable intellectual properties on U.S. soils. “Do you want to own the IP, the R&D and tax stream associated with that or do you want that going back to Asia?” Gelsinger further pointed out that “Taiwan is not a stable place”, noting the frequent incursions of Taiwan’s Air Defense Identification Zone (ADIZ) by Chinese warplanes.

“Does that make you more comfortable or less if you’re now dependent on Taiwan as the singular source of technology for the most critical aspect of our human existence and our national security and economy for the future?” The executive was reported to be saying.

TSMC Founder: Hard to restore Intel’s glory in five years 

Regarding Gelsinger’s comments on Taiwan, TSMC chairman Mark Liu merely retorted “not many people would believe it”. Liu further stressed that TSMC wouldn’t criticize its peers in the foundry business. Nevertheless, while Liu supported the U.S. subsidy programs, he believed it would damage the United States’ own semiconductor industry if the government only subsidised U.S. chipmakers. When asked how TSMC would handle the growing role of geopolitics in its global strategy, Liu reiterated the oft-said TSMC principle to orient around its customers.

TSMC founder Morris Chang, in comparison, was a bit more vocal in his reaction to Gelsinger’s views. Chang revealed that Intel, under its former CEO Bob Swan, had approached TSMC to collaborate on advanced products in an attempt to save R&D costs, but it was later called off. In addition, Chang also doubted that Gelsinger would have enough time to put Intel back on track. As the TSMC founder claimed, Intel’s rule required its leaders to retire at age 65. Since Pat Gelsinger is already at 60, Chang doubted that he could restore Intel’s former glory within five years.

♦ Further reading – TSMC founder Morris Chang: Expansion is the only choice

Despite the rivalry between TSMC and Intel, as the Taiwanese foundry successfully brought its 3nm process into pilot production, Intel has already taken steps to secure its production capacity so that it won’t get squeezed out by other TSMC customers, especially Apple and AMD. It has been rumoured that the GPU tiles within Intel’s 14th-generation Core processors due in 2023, Meteor Lake, will use TSMC’s 3nm process. Three unconfirmed types of server processors have been rumoured to use TSMC’s 3nm node as well. An industry insider also claimed that top Intel executives will visit TSMC in mid-December to discuss further partnerships based on its 3nm technology.

 

References: BusinessWeekly, Nikkei Asia, UDN (1), UDN (2)