Former Intel board members: America’s champion is likely to retreat, and we still need a leading-edge chip manufacturer

ary·ChipsFormer Intel board members: America’s champion is ly to retreat, and we still need a leading-edge chip manufacturerBy Charlene BarshefskyBy Reed HundtBy James PlummerBy David B

YoffieBy Charlene BarshefskyBy Reed HundtSEE MORE Charlene Barshefsky is a former U.S

Reed Hundt is a former chair of the FCC

James Plummer is a former Dean of Engineering at Stanford

Yoffie is a fessor at Harvard School

Ambassador Barshefsky, Mr

Hundt, fessor Plummer, and fessor Yoffie all served as longtime directors on the Intel board

Co-author Charlene Barshefsky when she was serving in her capacity as U.S

Trade Representative.Scott J

Ferrell/Congressional Quarterly/Getty ImagesA little over five years ago, the Trump administration announced Operation Warp Speed to der a vaccine for COVID-19

It was one of the most stunning successes of Trump’s first term

Now we must do it again

As a country, we have a strategic imperative to win in artificial intelligence and secure our supply chains for critical nologies, including communications, computing, and advanced military systems

Time is of the essence

Yet the Administration’s plans for AI and self-sufficiency are in serious jeopardy unless we have American-owned, leading-edge chip manufacturing plants on American soil

US advanced semiconductor manufacturing has been withering for some time

The once-leading Intel appears to be dropping out of the race

Missed deadlines, poor execution, and a misguided strategy to retain manufacturing within Intel while also serving as a foundry for its fabless chip competitors resulted in a dearth of customers

Recommendations (including those from the four of us) to split off Intel’s foundry and create a fully independent entity to supply its competitors, thereby giving itself a fighting chance, have never been adopted

Intel appears to have only a few external customers for its current nology (called 18A), and the CEO recently said on July 24 that “Going forward, our investment in … [Intel’s most advanced cess nology, 14A will] be based on confirmed customer commitments,” continuing a model that has largely failed

Unsurprisingly, the CEO also announced the shuttering of its plans for German and Polish plants, further delaying its posed Ohio plant, and a massive lay-off

More spending reductions will inevitably

All of these announcements strongly imply a gradual exit from the chip manufacturing , turning Intel into a fabless company over time

Given that Intel’s internal demand is no longer big enough to justify continued capital investment in leading-edge nology, this may be the right strategy for Intel

Still, it is the wrong strategy for the United States

With Intel’s ly retreat from advanced chip manufacturing, America’s future and the future of its leadership in AI and all advanced electronics will be firmly in the hands of two firms: Taiwan Semiconductor Manufacturing Corporation (TSMC) and Samsung, two firms headquartered on the other side of the planet

It also manufactures most of the chips for iPhones and 5G communications

While TSMC and Samsung have committed to building more plants in the U.S., these will not solve the blem

Neither company will bring its nology here

The newest generation of chips must first be developed in a plant geographically close to its R&D teams

In the case of TSMC, those teams are in Taiwan; for Samsung, South Korea

The only R&D team that has been advanced generation nologies on US soil, fabricated in the generation U.S.-owned plants, is Intel

But as Intel retreats, America’s future in AI and other advanced nologies is increasingly reliant on a single firm, located a stone’s throw from mainland China

To be sure, TSMC’s nological wess is impressive

However, the fact is that we are giving TSMC too much power over the allocation of capacity, pricing, and human capital to drive AI into the future

In the case of Taiwan, risk is compounded by the obvious geopolitical risks attendant to its

These dependencies are intolerable if the U.S. is to tect its own economic and national security interests

Fortunately, the Trump Administration has dealt itself enough cards to rectify this obvious vulnerability

The Administration recognizes that the United States needs advanced chip-making capabilities within our own country

To this end, by executive order March 31, the President created the United States Investment Accelerator at the Department of Commerce

It is responsible, among other things, for administering the CHIPS gram Office

Billions remain unspent from this Congressional gram

With CHIPS money, Japan’s partnership, and government investment —either direct or through Trump’s recent executive order to create a sovereign wealth fund —the federal government has the opportunity to launch “Operation Warp Speed II” and put America back on the leading edge of chip manufacturing

Speed is essential: As Intel downsizes and lays off thousands of people, we are losing and will continue to lose the best people

Soon, we will be without a viable foundation on which to build a new, world-class American foundry, for which Intel’s assets are critical

Here’s a plan: First, similar to the first Operation Warp Speed, the Trump administration should build a public-private partnership, where future customers (e.g., Nvidia, Qualcomm, Broadcom, Google, Amazon, Apple and others), Japanese investors such as Softbank, and private equity, backed by government financing and/or investment, would buy Intel’s fabrication assets before the lack of investment and the rust of time makes them worthless and leave the United States dangerously dependent on a single manufacturing firm

Second, the Trump administration has been very effective in persuading leading U.S. companies to invest in America’s future

They should be encouraged to partner and invest in a new American Foundry and to buy from it

Nvidia, Broadcom, Google, and others may have turned down Intel’s offering, but they cannot as easily turn down the opportunity to help create an independent, leading-edge domestic competitor to TSMC

American companies want (and need) alternative sources of supply, and this plan can vide them

Building a new American Foundry for advanced semiconductors is the best strategy to keep the United States and American firms at the leading edge of AI and advanced electronics, and to ensure that critical supply chains are not disrupted by geo, pandemics, or natural disasters

There is no time to waste

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