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00:00Talk to us about this spending and whether or not the government will be able to line up alongside you and put that money to work to help. Today was a great day and really was an honor to be with the president. Secretary Raimondo a sign of their support. And Senators Brown and there really is. I'll say enthusiasm for this project. And right now I'm here in Ohio with the governor and the state legislator leaders. Ohio State leader. And they are just thrilled to see this project coming to life. But as you know the question asking will we get the Chips Act done. And I'll tell you. Today's announcement clearly is breathing a bit of energy and momentum. Louisiana some across the legislators and President Biden and Secretary of Commerce Raimondo were just adamant that we're going to get this done right. The senators and congressional leaders good bipartisan good bye cameras support. So we're optimistic. And clearly as I communicated today you know we're assuming we get this done because we want to make this project go bigger faster and putting our chips on the table already. Pun intended. Well let's talk a little bit more about the projects specifically Pat and specifically what you want to produce out of this plan. Is this going to primarily be chips for your own business or is this going to be more centered around the foundry business and external customers. Yeah it's gonna be both. And what we said today is we're announcing two fab modules. It's a large location 1000 acres because I'd hoped to build out a full eight fabs or more on this location. And you know if we do that full project would be hundred billion over the course of the decade or so. So a massive project initially 3000 jobs 7000 construction workers supply chain et cetera. I mean this is just fabulous. And the products will be our most leading edge chips. So as we said this will be the Angstrom era when we're going to two nanometres and below into the Angstrom aerosol will be the most advanced chips potentially the largest manufacturing location in the world. We'll use its output for our internal products but also for those of the foundry customers as well. So it's going to cover both. And clearly we're expecting as industries like the auto segment which are very prevalent here in Ohio you know as they do more A V advanced 5 and 6 G connectivity infotainment you know they're increasing the use of leading edge chips as well. So we do expect that that's going to satisfy a full range of industries our products foundry customers and be a massive kick for making this as we called it today the silicon heartland not just Silicon Valley. Today begins the silicon heartland to talk to us. Why the heartland. What do you think about some of the economic incentives that were offered from Ohio. Why Ohio. Yeah and we looked at 35 to 40 sites many many different states across the nation. You know we're looking for you know a large flat location like we found here one with great energy and you know the ability to have strong support from the local government labor costs but more important than Labor talent. And here we are. And we had the president of Ohio State University join us. But many of you know essentially all of the Midwest universities are within just a couple of hours of the location that we've picked here. So it's quite central. And of course Ohio came forward very aggressively with support and economic benefits to really make this competitive. And that's what I've said for the U.S. chip sector is not that we're looking for handouts. We're looking to be competitive on U.S. manufacturing with U.S. IP on U.S. soil to allow us to compete to reestablish a globally balanced and resilient supply chain. And I think today's step forward was a huge step in that direction. Talk to us about how quickly the U.S. can regain that. How quickly you think these supply chain issues have been such a headache for your industry for all of the supply chains that you then have to serve the auto industry and many other. When can that be finalized. How quickly in a long term sustained manner will we see growth. Yeah. You know today's announcement you know we're just hopeful. Later this year we said we want ISE shovels in the ground and this factory won't come online until 2025. And obviously for all the consumers of chips they're like wow that's a long way out. Takes a long time to build such an advanced manufacturing location. And that's part of the problem of the near-term shortages that we're facing. It just takes a long time to build these very advanced sophisticated facilities to expand the semiconductor supply. Now the industry has done a great job. We've gone from maybe 4 or 5 percent growth to almost 20 percent growth last year. However we still expect that through 2023 that we're still going to be facing supply shortages. We just can't ramp up fast enough to this global surge in demand and Covid interrupted supply chains and cause work from home. You know everybody needs a P.C. now at home not just one. You know mom there the kids everybody needs one. And we've seen this across industries and through this year into. Sure we'll still be fighting to overcome the shortages for our audiences out there on TV radio on YouTube. We are in conversation right now with the CEO of Intel Pat Carlson. Pat I'm curious about just the change in strategy for Intel. Obviously you're relatively new in the job as CEO. Your predecessor Bob Swann had actually entertained the idea of actually doing away with a lot of the in-house manufacturing that Intel does even outsourcing a lot of that. Your strategy is clearly taking the company in a different direction. And I'm curious from a profitability standpoint a cost basis standpoint and also a competitive standpoint versus you know TSMC and some of the other folks that are in the same business. How is this strategy going to match up with that. Yeah. You know there's really three companies two in Asia TSMC and Samsung and Intel in the US that can manufacture at these leading edge technologies as I say going into the Angstrom era. And when I came into the company who was interviewing for the job with the board as a boy I want to break the company into I'm not the guy. You know my strategy is we are going to build and we're going to build aggressively our capabilities but also become a foundry for the industry. And the margins of the foundry business are good. And I believe if we have leading technology capacity like this we're going to be very effectively competing. But it's also more important than that. It isn't just an intel statement. This is an industry and a United States statement as well. You know we believe that this is more important to humanity than as I've said where the oil reserves are. Still every aspect of your lives is becoming more digital. Everything digital runs on semiconductors. We need this for economy. We need it for our supply chains. We need it for our national security. And Intel is really the company that can step into this. We've said decisively and with today's announcement we're going to step into this aggressively. We're going to build in America and Europe. You'll be a major supplier of our products but open the doors wide to become a foundry. And we believe that we have the technology the opportunity to do so at scale competitively. And today the silicon heartland begins. Where is the future end market. You said for P.C. or smartphone users hearing that the new one of the new facilities won't be up until 2025. Seems like a long time away. We could also be shifting the market. And I'm curious that end market on a 5G. You even mentioned the six G. What is that next generation look like. Yeah. You know the factory that we're announcing today 20 25 but we're just about to open a new factory in Oregon. We're already well underway in our Arizona factories. We have builds in Israel and Ireland going on as well. So we're rapidly expanding capacity. And those will be coming online over the next couple of years. And it really is servicing a very wide range of markets. It's everything from pieces to cloud providers to 5G and edge solutions also enabling high performance A.I.. Increasingly we're finding more of our chips into the automotive sector industrial sector. You know as I've said cars are becoming computers with tires. Today about 4 percent of the bill of materials of the car is semiconductors. By 2030 that's expected to go 5 DAX that to 20 percent. So you know they're becoming you know the most advanced infotainment autonomous driving electric vehicles. All of these are driving this explosion. And this investment is to cover a broad range of market segments. It will be our most leading edge technologies and potentially the largest manufacturing location for subway conductors in the world right here in the silicon heartland. Pat talk to the people who say people have just brought that ordering forward. They've panicked. They're worried that they're short of supply right now. The people have been stuck at home. One of the pieces that they possibly need. How sustainable is the demand. They call that has ramped up to 20 percent over the next few years. You know we do think that there's a step up in the industry and we analyze this very very carefully both in the P.C. segment the cloud segment but in a broader set of areas as well such as graphics. And you know this network Edge build out with 5G as that becomes the point. But you're seeing this in every aspect of human life even though the development of the vaccine right now is running the computer his radio essentially the RNA sequencing is done on computers. Every aspect of health care is becoming more digital every aspect of our human experience our social experience. You know we don't think that work from work is the returning vets work from anywhere going forward. So we do see this as a new model about of work that is more productive for the future. We see education become a. Less the less about where you are. But it is about what you're able to participate in. So all of these changes we don't see this demand decaying back postcode. We see it being a sustained acceleration of the digital experiences. And that's why you know our corporate statement and our vision is that we will produce technologies that improve the lives of average person on the planet. That's what we're about. And we see no no end of that digital demand.

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Intel CEO Gelsinger on 'Massive' New Hub, Chip Shortage

Intel CEO Pat Gelsinger discusses the company's plans to spend $20 billion on a chipmaking hub on the outskirts of Columbus, Ohio, and the efforts to alleviate the supply-chain issues in the semiconductor industry. He speaks on "Bloomberg Markets: The Close." (Source: Bloomberg)

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