Chips are the New Oil with Geopolitics: Intel CEO

[btarunr]

Intel CEO Pat Gelsinger, in an interview with CNN at WEF Davos, stated that semiconductor chip supply chains will have a greater influence on geopolitics than oil supply-chains over the next 50 years. Modern civilization is increasingly digitized, and most modern conveniences are "chipped" and connected in some form, which would put the chip-producing nations, or entities producing/supplying the chips at a distinct geopolitical advantage, similar to the oil-producing ones today. The location of "oil reserves [has] defined geopolitics for the last five decades," Gelsinger said; "where the technology supply chains are, and where semiconductors are built, is more important for the next 5 decades," he added.

We caught a taste of exactly what he meant when global semiconductor supply chains buckled around 2020-onward, hitting a multitude of other industries, including automobiles, construction, remote-work, consumer electronics, and much more. Unlike oil, which is a geographically constrained being a natural resource, chips can be manufactured almost anywhere, dictated only by geopolitical, trade, and IP barriers. Gelsinger calls for a much wider geographic spread of chip-production, so the supply-chains get resilient to disruptions due to unforeseen events. "We need this geographically balanced, resilient supply chain," he said. Gelsinger is at the forefront of advocating semiconductor manufacturing on U.S. soil to not only meet local demand, but also contribute to global supply-chain resilience. The CHIPS Act passed by U.S. Congress in 2022 will oversee more than $200 billion in public investments on semiconductor manufacturing and tech-research in the U.S.



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[claes]

Lol’d at the headline but over the next 50 years? Probably so

 

[the54thvoid]

Sounds like the right time for me to start up my mechanical car company - no chips needed; just lots and lots of winding.

To be serious; most nations are moving to develop their own chip manufacturing fabs. It makes sense long term, not even considering other factors. I think old Pat is doing the old intel shadow PR. Most things he says are loaded toward his company's interest and share value.

Anyway, while I'm here, formal advanced warning: points and reply bans wil be given to those who derail the thread with off-topic political posturing. This news post can easily be discusssed without resorting to aggressive nationalism and insults.

You have been warned.

 

[fibre]

What will happen after 1nm process node. New factories?

 

[Legacy-ZA]

Saw this coming miles away, so long ago.

This is why you keep it in-house while also providing jobs to your own populace, more expensive? Sure, but I don't see any owners of these companies living on the breadline.

 

[konga]

The difference with oil is that the supply chains there are limited by where oil can be extracted from. Any country can theoretically start making their own chips though, even if the hurdles are very high today. I would much rather see a future where fabrication becomes cheap enough that any country can produce or trivially procure the chips they need in their everyday lives rather than one where the chip supply is hoarded and controlled by a cartel of chip producers a la oil.

 

[Chaitanya]

Maybe for US but for Europe Oil and Gas are still Oil and Gas which are in serious short supply with OPEC+ choking their supplies.

 

[pavle]

So ol' Patsy thinks intel is going to last another 50 years?

 

[Wirko]

Oil and gas supply chain:

Electronics supply chain:

(actually I've seen a similar graph for semiconductors but can't seem to find it now; far more complex, and each point represented one country)

Gelsinger calls for a much wider geographic spread of chip-production, so the supply-chains get resilient to disruptions due to unforeseen events.

Combined with the eternal trend of cost cutting, this development will take us we-know-where: the number of countries whose industries are indispensable for chip industry can only go up over time, never down. Here's a nice example, Austria:

Austria’s Silent Monopolies On Advanced Semiconductor Manufacturing – EV Group and IMS Nanofabrication

All advanced logic, DRAM, NAND, and CMOS image sensor fabrication is dependent on AustriaThe semiconductor supply chain is a smattering of critical dependencies that would take a decade and trillio…

www.semianalysis.com

 

[Daven]

Rich guy at a conference for the super rich. Ignore every word and work to make these abominations (thanks for the word fervgatos) irrelevant.

 

[64K]

I don't agree with chips becoming as important as oil geopolitically. The world needs oil to survive. Everything from farming to distribution of food requires oil products. We can survive without some electronics. We can't survive without food.

 

[Wirko]

Anyway, while I'm here, formal advanced warning: points and reply bans wil be given to those who derail the thread with off-topic political posturing. This news post can easily be discusssed without resorting to aggressive nationalism and insults.

You have been warned.

The title doesn't mention any specific country or region so there's at least a slim chance of 24-hour survival for this thread.

 

[mechtech]

“CHIPS Act passed by U.S. Congress in 2022 will oversee more than $200 billion in public investments”

of which 0.2 billion/yr will go to Intel ceo

 

[Hofnaerrchen]

The difference with oil is that the supply chains there are limited by where oil can be extracted from. Any country can theoretically start making their own chips though, even if the hurdles are very high today. I would much rather see a future where fabrication becomes cheap enough that any country can produce or trivially procure the chips they need in their everyday lives rather than one where the chip supply is hoarded and controlled by a cartel of chip producers a la oil.

Exactly... acquiring knowledge is one thing, conquering regions with access to resources another. Getting a chip industry running "just" needs some politicians that are no complete duds, will, skilled people, money and time.

 

[AnarchoPrimitiv]

Water is the new oil, moreso than chips....for example, the Syrian Civil War just so happened to follow after some of the worst droughts in decades, Israel is trying to settle land the U.N. calls illegal due to rhe water under it, Ethiopia and Egypt are having disputes over the Nile, Turkey daming the Euphraties is causing shortages in Iraq....there's a CIA report stating that water will fuel the resource wars of the 21st century if anyone's interested in the subject...

 

[ThrashZone]

Sounds like the right time for me to start up my mechanical car company - no chips needed; just lots and lots of winding.

To be serious; most nations are moving to develop their own chip manufacturing fabs. It makes sense long term, not even considering other factors. I think old Pat is doing the old intel shadow PR. Most things he says are loaded toward his company's interest and share value.

Anyway, while I'm here, formal advanced warning: points and reply bans wil be given to those who derail the thread with off-topic political posturing. This news post can easily be discusssed without resorting to aggressive nationalism and insults.

You have been warned.

Hi,
Yep only issue is finding materials to make tech with.

 

[Vayra86]

So ol' Patsy thinks intel is going to last another 50 years?

Oh yes they will. Critical infrastructure support

Water is the new oil, moreso than chips....for example, the Syrian Civil War just so happened to follow after some of the worst droughts in decades, Israel is trying to settle land the U.N. calls illegal due to rhe water under it, Ethiopia and Egypt are having disputes over the Nile, Turkey daming the Euphraties is causing shortages in Iraq....there's a CIA report stating that water will fuel the resource wars of the 21st century if anyone's interested in the subject...

Yep... clean water... its going to be a thing, it already is.

Dark Reign - we knew this in '97

Dark Reign: The Future of War - Wikipedia

en.wikipedia.org

 

[bonehead123]

Gelsinger is at the forefront of advocating semiconductor manufacturing on U.S. soil

NO, the ONLY thing patsy boy is on the forefront of is keeping moar taxpayer money flowing into his gold, platinum and diamond-lined pockets.............

 

[64K]

Maybe Gelsinger thinks Intel should make more money and increase his compensation package from the 179 million dollars he made over an 11 month period in 2021. I read where Intel employees make an average of $100,000 a year so that would be about $92,000 over the same 11 month period so Gelsinger is being paid about 1,946 times as much as an average Intel employee.

 

[Prima.Vera]

What will happen after 1nm process node. New factories?

Update of the existing lines? Nothing special, just costly life cycle management and upgrade path - business as usually.

 

[crimsontape]

I found this actually a bit funny.

Semiconductors have been inseparable from the GDP growth and success of the world's most advanced economies for DECADES now, and probably a little more important than domestically secure food and energy production. It has been the case, since, oh, god, you can go back as far as the atomic bomb, but it really starts to roll over and change in the 60s 70s, with mainframe computers. The legendary IBM 360 put to shame any computers the Soviets were trying to build and produce at the time. Combine that with the advancements in mounted ICs and PCB tech used in the space programs, suddenly you have an insane recipe for success. "Chips that power nuclear bombs power my SEGA." - Crooklyn Dodgers

This tech-edge continues to be the pivotal competitive advantage between the West, its allies, and the rest of the world. Soviet MIG fighters were still using ferrite core memory in the late 80s. The Voyager probes had more advanced tech in them with fully integrated circuits. Russia and China have been playing a serious catchup game and they're still losing. Heck, because China knows how to make friends, they leap-frogged the Russians! Look up the fab list wiki. Russia's fabs are on average over 100nm, the smallest process available being 55nm. China's a little better but it depends on what they're producing; I think they have sub-20nm DRAM facilities, but that's not the same as producing complex microprocessors. They do however have quite the monopoly on power-related transistor products (which can easily be produced using old fab tech) and LED manufacturing... But, that's not really saying much.

Also, look at the money. The operating revenue of the biggest tech company in Russia is 6 billion or so (Yandex). The operating revenue of Apple is 120 billion, Google was 80, JP Morgan (for comparison) is 155. The biggest tech and software companies in China reach those operating revenues, but they're also operating out of a far larger country with far larger markets. We're talking Alibaba Holdings and Huawei. Their advantage is how they're on the better end of the supply chain (the start of it). I would say this is under threat as demand drops while the world licks overwhelming salty fiscal debt out of its wounds and treats everything with higher interest rates. Even in this economic climate, the West still wins and will continue to win because of the monopoly and eye-blistering advantage they have in processor architectures, transistor tech, tooling, as well as the supply of skilled workers.

I still believe what Gelsinger is saying is true, especially with maturing AI and deep machine learning. IBM cracked 2nm test DRAM last year, I believe. TSMC wouldn't exist if it weren't for Western tooling made out of the US and Europe.

Bringing back some of the production here to America, well, it's not as if it's NOT already happening. But, boosting it would mean a lot of jobs across the board - low, moderate, and high-skill labour of all kinds. Heck, you might be able to pay people enough to have families again lol

 

[kiakk]

I don't agree with chips becoming as important as oil geopolitically. The world needs oil to survive. Everything from farming to distribution of food requires oil products. We can survive without some electronics. We can't survive without food.

Ask and Amish group in the USA. They work on agricultura fields in classic, non-motorized way: horse. So they can also produce their own "fuel" to their own "engine" as well. I wonder that community. Maybe they have right about that how to live.