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Intel CEO sees ’10 good years’ of chip industry growth

Pat Gelsinger, CEO of Intel, speaks in Santa Monica, Calif. On March 9, 2017, in a photo taken while he was CEO of VMware.

Patrick T. Fallon | Bloomberg | Getty Images

Intelligence CEO Pat Gelsinger said he expected 10 “good years” of growth in the semiconductor industry during a panel at CNBC’s Evolve conference on Wednesday.

“We think the market, the world, is in a very expansionary period,” Intel CEO Pat Gelsinger told CNBC’s Jon Fortt. “I predict that there will be a good 10 years ahead of us, as the world is becoming more and more digital, and everything digital needs semiconductors.”

The note suggests that Intel’s investments in chip production, such as plans to spend $ 20 billion to build a chip manufacturing plant in Arizona, will create capacity that will be used even after the The current global shortage of microchips is diminishing. Intel also recently announced its intention to become a “foundry” or a company that makes microchips for other companies.

Gelsinger said Intel plans to announce an additional “mega fab” in the United States or Europe before the end of the year.

Gelsinger appeared on a CNBC panel alongside Qualcomm CEO Cristiano Amon. Both started running their businesses earlier this year.

While the two companies are rivals, the CEOs have played down the competition and suggested that the two chipmakers may end up teaming up in areas where they don’t overlap. Qualcomm (among other things) makes chips that connect to 5G networks, while Intel primarily builds central processing units (CPUs) that provide basic computing power.

“You know, we’re the clear leader in compute, and Qualcomm is the clear leader in communications. Compute meets communications. Okay, lots of new use cases,” said Gelsinger.

Amon said he believes Intel’s foundry plan could be of benefit to Qualcomm, which uses external foundries to manufacture its chips.

“There are a lot of opportunities for companies to cooperate. Look, we are looking at Intel and Qualcomm in real tech companies in the United States, we are doing a lot of advanced and fundamental research to move the industry forward,” Amon said. .

The two companies share certain strategic concerns. They are both likely to be boosted by a package included in a technology bill currently in the United States House of Representatives that providing $ 52 billion to fund semiconductor research, design and manufacturing.

“We are also very happy to build a much more resilient supply chain, with the offshoring of semiconductor manufacturing, I think that is also very important,” said Amon. “You need investments of this magnitude to make this happen.”

The two companies are also keeping a close eye on their rival Nvidia‘s buyout of Arm from Softbank for $ 40 billion. Arm technology is particularly important to Qualcomm because it is essential in designing the type of low-power microprocessors used by smartphones.

The deal also makes chipmakers nervous about needing a critical intellectual property license from a competitor, and faces regulatory challenges in Europe. Currently, Arm does not make full chips – it just designs the underlying technology. On Monday, an Arm spokesperson told CNBC the company was “extremely confident” in approving the deal.

During the weekend, Amon told a British newspaper that if the deal were blocked or if Arm remained independent, Qualcomm would be interested in investing in Arm.

Asked about Amun’s comment, Gelsinger said, “We officially state that we are concerned about the acquisition of Nvidia-Arm. And if there were other possible approaches, we would certainly be interested in understanding them.”

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