Nvidia is in talks with Intel about the possibility of using the tech giant as a foundry for manufacturing its chips.
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“[Intel is] interested in us using their foundries,” Nvidia CEO Jensen Huang told reporters during a Q&A session at the company’s GTC conference on Wednesday. “We’re very interested in exploring it and being a foundry at the caliber of a TSMC.”
He emphasized that the task is “not for the faint of heart.”
“This is a change, not just in process, technology and investment of capital, but it’s a change in culture from a product-oriented company, technology-oriented company, to a product, technology and service-oriented company,” Haung added. “TSMC dances with the operations of some 300 companies worldwide.”
Intel CEO Pat Gelsinger told FOX Business’ Mornings with Maria on Wednesday about the company’s plans to become a major U.S. foundry supplier, but did not mention discussions with Nvidia. Intel declined to comment on Huang’s remarks.
Shares of Nvidia surged 10% and Intel stock climbed nearly 7% during Thursday’s trading session.
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Haung noted that foundry discussions can take long periods of time, citing its partnerships with TSMC and Samsung taking “years to cultivate.”
“It’s not just about desire. We have to align technology, the business models have to be aligned, the capacity has to be aligned, the operations process and the nature of the two companies have to be aligned. It takes a fair amount of time and a lot of deep, deep discussion,” he explained. “We are very open-minded to considering Intel, and I’m delighted by the efforts that they’re making.”
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He also shrugged off any potential concerns of Nvidia sharing its secrets with Intel.
“We have been working closely with Intel, sharing with them our roadmap long before we share it with the public, for years. Intel has known our secrets for years. AMD has known our secrets for years,” he said. “We are sophisticated and mature enough to realize that we have to collaborate.”
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The discussion between Nvidia and Intel comes as the world continues to feel the pain from an ongoing semiconductor chip shortage, which some industry leaders have said could stretch into at least 2023.
According to the Semiconductor Industry Association, the share of global semiconductor manufacturing capacity in the U.S. has dropped from 37% in 1990 to 12% today, largely due to substantial subsidies offered by the governments of global competitors. The Congressional Research Service estimates that almost 90% of global advanced semiconductor production is concentrated in Taiwan and South Korea.
In January, the Commerce Department disclosed that chip inventory plummeted to less than five days in 2021 from 40 days in 2019, elevating the push for more government spending. Commerce Secretary Gina Raimondo and others have called on Congress to pass the Bipartisan Innovation Act, which would invest $52 billion in domestic semiconductor production, innovation and advanced manufacturing, as well as create the United States’ first Supply Chain Resilience Office.
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In order to reestablish U.S. leadership in semiconductor manufacturing, Intel has announced a more than $20 billion investment to build two chip factories in Ohio, including a $100 million investment over the next decade to build a pipeline of talent and support semiconductor industry research, education and workforce development across the United States.
The factories are expected to create 3,000 high-tech jobs and 7,000 construction jobs as well as support tens of thousands of additional long-term jobs across a broad ecosystem of suppliers and partners.
It also announced plans in September to invest $20 billion on two new leading-edge chip factories at the company’s Ocotillo campus in Chandler, Arizona, bringing its total investment in the state to about $50 billion.
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Meanwhile, Micron Technology is investing $150 billion globally over the next decade in memory manufacturing, research and development, including a potential United States fabrication plant expansion.