Intel CEO Admits Big Gap With TSMC, Sees Full Potential by 2030-2032

Intel CEO Pat Gelsinger acknowledged a substantial gap between Intel's foundry business and industry leader TSMC, stressing the need for humility and a focus on foundational improvements. "We have to stay humble and focus on building the foundation, making the foundry business more efficient and reliable," Gelsinger stated in a podcast interview. He believes Intel's full potential in this area will only be visible between 2030 and 2032.

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In terms of foundry, we still have a big gap with TSMC. We have to stay humble and focus on building the foundation, including the IP ecosystem, yield, defect density, and process cycle time, to make the foundry more efficient and reliable.

Gelsinger discussed his collaboration with Elon Musk on the Terafab wafer plant project and the impact of AI on the semiconductor supply chain. He outlined Intel's transformation strategy and its foundry ambitions, highlighting the critical importance of the foundry business for the U.S. and the broader industry. Intel is developing advanced process nodes, including 18A (1.4 nanometer) and planning for 1-nanometer and 0.7-nanometer technologies, acknowledging the extreme complexity and precision required.

He expressed deep respect for TSMC, calling them a good partner, and emphasized the industry's need for increased capacity. "This is a business of trust," Gelsinger said, explaining that customers must trust Intel before entrusting them with their wafers. He sees continued investment in foundry as a crucial long-term move and an area where he can add significant value to the industry.

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This is a business of trust. Customers must trust you before they hand over their wafers to you.

While acknowledging the PC client market as Intel's core business, Gelsinger sees future growth extending to edge and AI applications. He remains optimistic about Intel's chances in both smart and physical AI, declaring, "This game is not over yet." He also noted that Intel has already delivered a sixfold return for shareholders in the past 14 months and aims for a tenfold return within five to ten years.

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I think people will start to see Intel's true potential between 2030 and 2032.

Gelsinger predicted AI's impact will surpass that of the internet, with the most affected companies being those that fail to embrace it. However, he identified several bottlenecks hindering AI demand growth: power limitations, the significant but often overlooked impact of helium on semiconductor manufacturing, and a pressing memory shortage. The high demand for CPUs and GPUs is also driving up prices, a cost that will ultimately be passed on to customers.

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We have a lot of respect for TSMC, and we are good partners. The industry needs more capacity to serve customers, so we decided to persevere. This is a critical move in the long run, and it's where I can create more value for the industry.