we are searching for economic growth
across the world that is one of the big
stories this week at the world economic
forum in davos switzerland joining me
right now live from davos is the ceo of
intel pat gelsinger pat it's great to
see you thanks very much for being here
i want to talk a bit about your panel on
industrial development but let's start
with your own plans at intel you have a
major investment and expansion plan at
hand where you are expanding a capacity
in terms of manufacturing in the united
states as well as europe tell us where
you are in this plan right now pat
yeah things are coming along very well
maria we've announced major expansions
in our arizona location new mexico but
the big exciting one was the mega site
in ohio and this idea of the rust belt
ending and the silicon heartland
beginning oh you know it's just captured
the center of the nation the
manufacturing core of our nation hugely
excited about it but we've also
announced major expansions in europe as
well we announced a big new facility
that we plan on doing in magdeburg
germany and complemented by other
activities in france and italy uh
ireland and poland so overall we're in
an investment cycle you know to build
the capacity for the world and obviously
we've seen in the semiconductor shortage
we need more capacity for the world and
intel's stepping into that in a bold way
well i tell you you really are pat and i
think so many businesses and individuals
are grateful to intel for doing this
because we have learned a hard lesson
over these last several years of how
reliant the united states is
to have so many critical components made
overseas can you assess the last couple
of years pat and tell us how the supply
chain
problem and this reliance on chips
overseas has impacted business and the
economy here
yeah you know in a couple of points
there maria you know the first one is
this didn't happen the last couple of
years this was 30 years in the making
right where we saw very strong
industrial
very strong industrial policies in china
korea taiwan right you know they were
driving these investments uh here in
those regions and we used to be 80 of
this industry now we're 20 of this
industry an industry we created in the
united states and now he said we want to
have a more balanced world you know we
said our moonshot would be by the end of
the decade that were 50 50 50
in u.s and europe 50 in asia to
accomplish that balance now obviously
the last couple of years oh my have we
seen the implications of that you know
and most acutely in the auto industry
you know i can't ship a 30 000 car i
have to idle a plane to detroit to the
midwest because of a two dollar
semiconductor component unacceptable
economically unacceptable socially
unacceptable politically unacceptable so
we aggressively need to rebalance the
supply chains that's obviously part of
my time here in davos just specifically
i focused on that because we see this
need for public-private partnership and
right now the us with the u.s chips act
we are just saying you know congress get
this done you know we need this finish
right now we need republicans democrats
house and senate to come together to get
it finished so we can aggressively build
out as i said we're going to go slow and
small or we're going to go big and fast
in the u.s depending on the outcome of
the chips act time to get every one of
your listeners voting in favor calling
their congressional leaders let's get
this done right now
yeah you're absolutely right good point
on all of that but what about the
shanghai lockdowns that also weighed
into things over the last couple of
years when would you expect the
semiconductor shortage to level out or
stabilize is this a 2023 24 affair
yeah you know a year ago i said it was
23 until we got to some reasonable
balance uh now i think it's 24 and the
combination of equipment supplier
shortages essentially the equipment that
we use to go into those fabs on building
you know those supply chains have moved
out significantly and then combining
with things like the shanghai shutdown
and what we've seen in shanghai was you
know a startling right you know that uh
because of the covet policies we've seen
the port shut down and it's just created
this backlog of equipment to get through
that you know it's even worsening some
of the supply situations that we've had
but i think it's again emphasizing we
need more balanced supply chains right
you know we don't want anything going
through any one port whether that's us
european or asian right we need a
geographically balanced resilient supply
chain and this week's you know
activities and or the last month's
activities in china just reinforced that
point so importantly we're not ever
going to stop being in china but we need
a balance across the world
well it's a good point because apple has
said that they want to increase
production of their products uh away
from china they're going to still be in
china as well but they're also talking
about the need to expand capacity uh
elsewhere away from china so do you see
that increasingly do you hear that from
uh customers what do you want to say
about that in terms of uh having less
reliance on china
a geographically balanced resilient
supply chain you know that is the agenda
that we are on what that means is hey i
want more in vietnam thailand india
right i want more in mexico and north
america we want more in europe we want a
balance across the world so no one port
shutdown or no one geopolitical
instability creates this kind of ripple
effect you know that we have no single
points of failure in the supply chain we
also see that this is actually you know
good policy as well it's good politics
you know the less dependent you know the
more that we can manage through
different you know issues that we might
have you know we also give clearly as we
said we want more of these jobs back on
american soil you know these are great
jobs in the semiconductor industry high
paying manufacturing jobs the full range
of the skill
set but it's also construction jobs you
know we're going to employ we estimate 7
000 people are going to be employed to
build out our ohio facility across the
full spectrum of construction and our
workers you know it really is touching
everything we're building a little new
city there you know that really that is
a catalyst for the entire tech industry
the silicon heartland and we want to go
make that happen as quickly as possible
i love that that is such a great point
and at your investor day earlier this
year you talked about a two-stage
financial model uh putting investment in
place through 2024 and then a longer
investment phase uh beyond into 2025 how
do you balance that with this very tight
labor market and this pressure on wages
that pretty much every uh
industry is feeling right now
yeah what we've said is hey we're we're
in an investment we're in a build cycle
that is for the rest of the decade you
know today you know the semiconductor
industry about 600 billion and by the
end of the decade 1.1 trillion they were
saying man you know that's an incredible
thing we don't want to get too focused
on any one quarter because we're
building for the decade and as we look
at those plans it's also helping to
establish the labor markets you know
we've seen extraordinary response from
the midwest community on you know
stepping forward for construction
workers but also the university saying
what are the degrees that we need to
create you know and how are we going to
create the semiconductor and
manufacturing expertise that we need
we're also seeing a lot of people saying
oh you know the coast or the center of
the nation oh you know let's start
rebuilding in the center so we really
feel it's you know laying it out for the
decade as a path that we can go execute
upon we're really thrilled the response
that we've seen and we are well under
our way
pat real quick before you go what are
you hearing from your corporate clients
in terms of spending on on this kind of
work r d spending we're all talking
about the potential of a recession how
does the macro story feel to you based
on what you're hearing from business
spenders
yeah and they're you know everybody is
sort of saying hey there's maybe a
little bit of softening you know
inflation related tightening of monetary
policy you know we probably do have some
cutting back in some of those areas and
we're seeing that through some of our
customers who are adjusting their
inventory levels appropriately for that
but given how long we've been trying to
catch up to demand i'd say
maybe a little bit of softening actually
helps us bring things back into a
balance more effectively and you know
against that you know we think that
you know the long-term outlook for
technology you know what aspect of your
life maria is not becoming more digital
everything digital runs on
semiconductors this is an opportunity
for us to build for the future that we
want uh collectively you know we also
see like in the chips huge focus on
long-term r d you know so all of these
pieces put together it just all makes
sense we're anxious for congress to get
their job done you know so that we can
do our part by building out getting the
skills getting the manufacturing you
know and establishing that future here
for us in america
yeah take the bureaucracy out of it
right just let's get to work and get
done what needs to be done pat i love
what the analyst accounting company said
about you he said we believe intel hired
the right leader that gives the company
the best chance to do so uh restoring
leadership and getting ahead of
competitors so congrats to you we'll be
watching thanks very much for joining us
this morning pat
thanks maria