The location of “oil reserves [has] defined geopolitics for the last five decades,” Gelsinger said in an interview with CNN’s Julia Chatterley at the World Economic Forum in Davos. “Where the technology supply chains are, and where semiconductors are built, is more important for the next 5 decades.”
CNN
Intel has said that it will be investing $20 billion in new plans in the US, and $90 billion in new European factories. It’s an interesting take, probably the most succinct way of saying what is apparent to everyone in tech: there is real movement and political will (which translates into government money) to reduce reliance on the concentrated supply of semiconductors from China and Taiwan. Of course, no one said anything about the issue before the pandemic because there were no supply chain issues and profits were good. Post-pandemic the industry figured out that it couldn’t put all its eggs in one basket, especially if that basket was going to be inaccessible in an emergency.
No one is going to get it right. No one is going to be able to spread those billions of dollars in fabs in a way that will make total sense. And considering the political input into the process, that can cloud judgement, too. Nevertheless, there is no going back now. Chinese and Taiwanese supply chains will feel the impact of diversification. The Japanese car industry went through something not dissimilar in the 70s and 80s when American car makers called for limits on imports from Japan. By 2004, 70% of Japanese cars sold in North America were made in the US. By 2010, there were 39 Japanese factories in North America. How many Chinese, Taiwanese, and Korean for that matter, display factories will we see in the US by 2030.
