Since we first published our deep dive, Building An American TSMC, on August 5th, the broader world of interested parties has clearly demonstrated that they agree with our conclusions about Intel and its critical role in the pursuit of domestic chip capability. Since then, the US government announced it would take a ~$9 billion stake in the company. Meanwhile, SoftBank has announced a $2 billion investment in the company. Government involvement, in particular, has been framed as a necessary step in protecting American industrial capacity.
The wake-up call is a necessary starting point. Losing the only cutting-edge American chip fab is unacceptable. In pursuit of protecting that capability, we’re optimistic about the signs of conviction in supporting Intel. That being said, there are some critical elements if we’re to have any hope of Intel becoming the flagship in domestic chip fabrication. And it’s not just throwing money at the problem.
In the piece, we articulate a specific playbook for making Intel successful. We believe some crucial elements of that playbook need to be executed in order for Intel Foundry to be successful:
Install visionary, engineering-first leadership dedicated solely to Intel Foundry.
Treat the foundry as a growth business, not a cost center, with investors and government backing willing to absorb short-term losses for long-term capacity.
Ease regulatory bottlenecks (e.g., reform NEPA permitting) to accelerate fab construction.
Use policy tools like tax incentives for customers that commit to buying from Intel Foundry.
Support semiconductor R&D as a national priority, especially beyond silicon toward new materials and computing paradigms.
Build a loyal customer base of US tech companies (hyperscalers, defense contractors) that commit to American-made chips.
The optimistic case is that three of these six things could be directly impacted by government regulatory reform. Whether the political will exists to make them happen is another story. Two of the other requirements are a function of investor and customer appetite. Will investors (whether financial or government) be willing to focus on Intel as a growth business rather than a cost center in need of optimization? And will US tech companies be willing to commit to becoming primary customers of American-made chips?
Candidly, the only way that most of these things fall into line will likely rest on the success of the very first point: Install visionary, engineering-first leadership dedicated solely to Intel Foundry.
Until Intel Foundry has a crystallized articulate view of the path forward, it will struggle to shore up the regulatory support and investor buy-in required for this kind of transformation.
As much as Intel is focusing on bringing in capital and generating broad support for what its doing, the long-term success is much less likely to get built up unless the business unit is led by a visionary leader focused on helping Intel Foundry achieve what its capable of: becoming America’s Foundry.
