February 16, 2022 • 25 mins
On the latest episode of Bloomberg Studio 1.0., Emily Chang speaks with Intel CEO Pat Gelsinger on the heels of his one year anniversary, about Intel's bold bets to bring semiconductor manufacturing back to the United States, and his vision to reshape the competitive landscape of the $500 billion chip industry.
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Speaker 1 (00:00):
Thank you so much. So do you have a direct
line to the president? Now? Well, he's enthusiastic. Uh, you know,
obviously the project is significant and a lot of interest
around it, but you know it's also he says, hey,
I really want your views, you know, I want you
I want your views on the semiconductor industry, on the shortage,
you know, how to be you know, a more effective
(00:22):
partner with business, some of the geopolitical topics. So we're
we have a date plan to get together again. When
you talk to him, do you feel like he learned
something like? What did he take away from the conversation?
You know, I gave him a twenty minute of briefing,
you know, and some have said, you know is you know,
how how there is he But he was engaged. He
was asking questions, seeking to understand, excited about the benefits
(00:45):
to the region. And I'll tell you, Emily, this this
idea of the silicon heart land, it's just pulled on
something deeper in the nation. And uh, you know right,
you know, the plans have sort of been underwork and
all of a sudden, you know, hey, you know, let's
get this announced. The want to want a kick in
the pants for the chip sick. That's Intel CEO Pat
(01:05):
Gelsinger sharing details on his recent meeting with President Biden
at the White House. This after unveiling a plan to
invest tens of billions of dollars in the American heartland
of Ohio, create thousands of jobs, and bring chip manufacturing
back to US soil. It's part of an ambitious effort
to revitalize a lagging company and rest control of an
(01:25):
industry from Asia. But the question remains, will it work?
Joining me on this edition of Bloomberg Studio at one point,
oh Intel CEO Pat Gelsinger on his one year anniversary
of becoming CEO. He's returned to the company where he
spent the first thirty years of his career to shake
things up, and he hopes to restore the chip maker's legacy.
(02:00):
That's so good to be here with you. It's always
a joy, Emily, to be with you. Thank you for
having me and here at the Intel Museum, which is
obviously a sign of the legacy you're part of because
you worked here for thirty years. Yeah, yeah, thirty years,
you know, in eleven year vacation and then now back
for just about a year. So tell me about that
(02:20):
call when you got asked to come back as CEO
or coming up on the one year anniversary. It was
right before Thanksgiving a year plus ago, and the request
was would you consider joining the board? So I asked Michael, right, hey, Michael,
what do you think? Right? He says, hey, they need
to help go help him, and uh, yeah, you know that, Michael,
(02:41):
And uh, you know, the vm Ware board was okay, yeah,
you know they you know, with Michael supporting it, We're
okay with that. So why interviewed to join the board
for the month of December? They said, would you consider
being the CEO? So it just ruined my Christmas season
last year. Your eighth grandchild is on the way, and
(03:01):
you know, the vm Ware gig and I wanted to
get the public offering of vm We're done and everything.
So it was sort of like wow or wow, and
you know, how was that going to play? So three
weeks of chaos and then obviously the January fift announcement,
you know, and the idea of coming home, you know,
being a successful CEO, coming back now to the company
(03:22):
that I was born and raised in. As I like
to say, I went through puberty here I started so young,
and now the opportunity to lead and really help the
resurgence and re establishment of this iconic company that really
is the honor of a lifetime. Well, was it like
to return to a company that has so much history
which you were part of, but also knowing you needed
to shake things up? The first first staff meeting, you know, February?
(03:45):
You know they usually started at nine I started the
first one at seven am, and the first bullet of
the first slide. We will have a toward pace, right,
just setting them. Yeah, it's it's a new word in
the intel of vocabulary. The industry is moving rapidly, massive shortages. Uh,
the competitors are performing well. Hey, what we've been doing
(04:09):
ain't working. Team. We have to set a new course
for the future, and that's gotten underway very rapiding. We've
gotten a lot done over the first year. But you
don't change, you don't fix, you don't re establish. After
a decade of bad decisions and poor execution, It's gonna
take a while, but we're well on our way after
year one. He took a job in the middle of
(04:29):
a pandemic, in the middle of a supply crisis. Two
themes that are still with us today. If you could
give yourself an honest one year report card, what would
it say, give yourself a grade? Well, let me give
you two grades. Let me give you two grades. The
board gives me an A. Myself, I give myself an
A minus. Right now, in some regards, we're ahead of
(04:49):
where I thought we'd be. In some areas were not
as far as I thought we'd be. And it really
is more a statement of the massive challenge in front
of us. And we still got analysts out here. Someone
piss me off, right, you know, I call them my
bears and my perma bears at that and sort of say, yeah,
it's the right strategy, pat, but I'm not sure if
(05:10):
I need to invest for a year or two. You
know yet you know whence you're going to start materializing
in the marketplace as well. So good progress. It's a
good year behind us, and people are really getting excited
about the new old. Do you ever have it out
with the perma bears? Of course, you know, we'll debate
on different aspects, and hey, I appreciate the virgent views.
(05:33):
You know, that's part of the intel culture, right, you know,
Andy would argue everything as I would say, if you
were right with Andy, you were wrong. Well, you know
something about hard work because you grew up on a
farm Robson. Yeah, I say, when you know, between Redding
and Hershey halfway as rob a zone and we were
five miles outside of town. So when you got nowhere,
(05:55):
we were five more miles. But tell me about your upbringing.
How do you go from farmer in the bile of
Pennsylvania to engineer in Silicon Valley. My dad number nine
of ten kids, and Grandpa said, you know, we have
enough farms in the family. Just work with your siblings.
I'm the oldest boy. Had we had a farm, I'd
(06:15):
be the farmer, because that's what the oldest boy does.
Sixteen years old, accidentally took a scholarship exam and one
so I ended up, you know, having the opportunity to
go get a technicians degree, you know, community college. And
so at sixteen years old, skipped my last year and
a half of high school, finished my associate's degree, and
(06:37):
Intel came interviewing for technicians. So here I am eighteen
years old. Intel on the West Coast invites me to
come for an interview. Never been on an airplane, never
been to the West Coast. How long do you think
it said took for me to say yes offline to California, right,
It was like to nano seconds and they offered me
a job. And the interviewer said, you know, in the
(06:59):
interview he said smart, aggressive, arrogant, he'll fit right in.
You actually became the chief architect of the processor Intel processor, right, yes, yes,
And you had to pitch that to Steve John. I
want to hear about that meeting. You know, Jobs and
Andy they had argued early and Jobs went off on
a different path, right, And because of that that we're
(07:22):
using other microprocessors. And so I tried to convince Steve
come back to Intel, right, So, and I tried to
sell him in the three D six. He sort of
threw us out. I tried to sell him in the
forty six, and he threw us out at the time.
And eventually we want him over with the Centrino products
some number of years later. But you know, it was
(07:43):
also his insatiable detailed demand for engineering and industrial engineering excellence,
you know, And to me, that's just what set him apart.
(08:04):
This is my conversation with the CEO of Intel, Pat Gelsinger,
coming up, how the chip Giant plans to boost production
to meet a surgeon demand by making bowl bets in
the foundry business and new product lines. But can the
company pull it all off? And at once we discussed
Gelsinger's vision to bring manufacturing back to the United States.
I'm Emily Chang, this is Bloomberg Studio one point out,
(08:27):
stay with us. You became Intel's first CTO. When did
you know you wanted to be a CEO? That you
wanted something more? So in my twenties, I had my
first patent, I had my uh first book being written,
(08:50):
Programming the six It was a best seller, Emily right,
you know, had you know, gotten to be a VP
of the company right at the youngest VP ever? And
it was like, okay, what do I want to do next? Right?
And then through that was sort of the soul searching time.
And I wrote my mission statement that said become CEO
of Intel. And you know, here I am six year
(09:13):
olds being You've got been kidding me? Right, you know
what are you talking about? And but it became this
driving force in me that I'd be in meetings with
Andy Grove, Bob Noise sort of. I was armchair CEO
ing for a decade and a half as I'm sitting
in the room, you know, with these industry legends, and
(09:33):
all the time it was making me better. A lot
of people thought you would be a shoeing for the
CEO job when that job came open. So why did
you leave if this was your dream job? Yeah? You know,
there was a period of time under Odeline. He's a
leadership where he had a different view of leadership, different
view of what he wanted his successor it's to look like.
(09:53):
And you know, literally I was nudged out of the
company at the time and I was pushed out. Let's say,
you know somewhere between those two. You know that eleven
year period. By the way, Steve Jobs was outside of
Apple for eleven years, right, And there's something I'm trusting. Yeah,
you know, being away and I call it the death
(10:13):
of a vision, your period where you really have to
sort of look and say, Okay, why am I pursuing this?
Why wasn't I ready for that job? Out of these circumstances,
What am I going to learn? I've also seen the
vm Ware and the Dell and the e MC culture
up close. I just feel so much more equipped now
and had I stayed on the linear path to CEO,
(10:36):
I wouldn't have been the leader that I am today.
So those eight years as CEO of vm ware hugely value.
You wouldn't change a thing. I wouldn't change a thing, right,
And I learned the value of software, and hey, and
I's gonna do a whole lot more software in the future,
I promise you. But it was also a period of
personal development as well, developing humility, confidence, insights on how
(11:00):
to be a leader at this scale. Moore's law has
guided the development of the chip industry for decades. It's
not a law per se, but it's been critical to
the development of semiconductors. We might even go super Moore's
Law this decade. And you know four reasons I said
this case. We know how to build transistors that we
can see them scale for the next decade. We have
(11:22):
power delivery. You know, how do you get the power
into and out of the chip with our power via technology. Third,
we have the lithography. We also see that packaging will
called two and a half and three D, which is
becoming much more like wafer building as we look to
the future. So here we are a hundred billion transistor
chip will be our largest chip that we do today,
(11:43):
or ponte Vecchio for high performance computing. By the end
of the decade, we will deliver the trillion transistor chip.
And I just say, you know, with utter confidence, I
sit here and say, my team's gonna make that happen.
So industry, buckle up, Hang on, we are going for
a ride. So what happens after a decade? I mean,
do you think Moore's law can continue forever? To be
(12:05):
Moore's Law has always been about a decade right where
we can see in front of us the core technologies,
the barriers. You know, we're lining up the things that
will allow us to do it. So five years from now,
we'll have the next interview, Emily, and you'll say, are
you still good for a decade? And I hope to
be able to answer that question. Yes. So we have
a date in five years there we go absolutely. Um,
(12:25):
your strategy involves doing multiple things that Intel has never
been able to pull off before at the same time
moving into boundary for example, why do all of these
things at once? These are reinforcing strategies. It's not like
this one is in conflict or separate from the others,
but they are making each other better. And let's talk
about the foundry as an example of that. If I
(12:48):
open my foundry doors up, that means I have customers
benchmarking my process technology every day. Right, I'm not an
internal guy anymore. Instead of just saying here's my chip
or you and go to external foundries, I'm gonna say,
let's go together and we'll bring some of your stuff,
will optimize some of our stuff. Also, some of the
new business areas that were launching. Hey, we've been in
(13:10):
internal graphics forever. You know. Now we're going to do
discrete graphics. We're gonna build on things that we're already
doing and doing well. Now. Investors seem to be really
excited about the ambition, the speed, the aggression, that the
torrid pace, if you will, But they're not excited about
how much it's going to cost. And they want to
know about margins. And I know you've said five years
(13:30):
that's when you know those historically high margins will return.
That's right. It's going to be at a couple of
years of investment. And I am proud of making those investments.
We're not being managed on a quarterly Wall Street view right.
We are investing for a long term return and I'm
pretty darn proud of that. And you've budgeted up to
twenty eight billion dollars here, but your rival Samsung t SMC,
(13:52):
they're planning to spend way more than that. So is
there a chance this could cost even more than you're planning. Well,
what we've said, you know, we've said, you know, twenty
eight billion four this year, and it could go up
next year in the year after. This is big business,
This is big capital investments. This is a big manufacturing expansion.
We're pretty proud of the position. And boy, having doubled
(14:15):
my you know, my capital investments here and year. Hey,
we're not being bashful about the big steps forward that
we're taking. And with the announcements that we've laid out,
you know, we believe that we'll be back in fundamental
process leadership. So I think I saw you wearing a
Christmas sweater taking some shots at Lisa, Sue and a
d I believe you said they're already in the rear
(14:36):
view mirror. They're never going to be in the windshield again.
I asked her about this, and she she said, you know,
we're playing our own game. And we feel good about it.
She didn't even say the word Intel. What's your reaction
to that. Well, Lisa's done done a good job with
a m D as a company, and hey, you know,
I think we're back to a leadership position in the
client and uh server. Hey, we've got a little bit
(14:58):
more work to do, uh in that area. Is it
possible the industries in an arms race that will lead
to spending itself into an oversupply. I mean that has
happened before. We we we've looked at this very carefully.
And the digitization of everything. Tell me what aspect of
your life, Emily, isn't becoming more digital? Well, I'm trying
(15:21):
to prevent that. But yeah, you know, and COVID has
accelerated that. The industry cost five billion dollars last year
the semiconductor industry overall, and estimates are a trillion dollars
a doubling by the end of the decade. At that point,
I believe those estimates. It's not that there's not going
(15:42):
to be some blips and turns on the way, and
the majority of that is driven by leadership process technology,
of which only three companies can satisfy that need. Intel Samsung, TSMC,
and we are destined to grow faster than the market
to accomplish that objective. Over that time, you're listening to
(16:13):
my conversation with Pat Elsinger, Intel CEO up next. To
regain the throne, Intel has to fend off stiff competition
from rivals like TSMC and Samsung, companies that are getting
significant funding support from their governments, and tech giants like
Apple and Amazon boxing Intel out to design their own chips.
(16:34):
Can Intel turn back the time? That's next? I'm Emily Chang,
this is Bloomberg Studio. At one point, Oh, do you
feel you're getting as much support as your Asian rivals
are getting from their governments? You know, I think in
(16:56):
the past clearly they've gotten more right, unquestionably, and I
think we've seen over the last number of months is
really that the entire political uh infrastructure in the US
realizes how critical this is. This isn't just any industry, right,
This is the heart of what the automotive industry needs,
(17:16):
of what the industrial industry needs, what the medical industry needs,
the consumer industry, the cloud industry. Every one of those
relies on semiconductors. The national security relies on semiconductors. This
is a priority for the nation. Well, speaking of national security,
tension between the US and China is escalating daily. The
US is your home market, China is your biggest market.
(17:39):
Isn't that a risk to Intel's future? The US China
relationship now very critical? Big market for US. So you
know we're in China. We're navigating that carefully. US global
market big important for US. And I'll say, you know,
how do you navigate that carefully? Right? Requires you to
be deaf, thoughtful, engaged with the police, dical leaders, the
(18:00):
business leaders on both sides. Definitely consumes a lot of
our energy and we have to navigate it well. Intel
asked suppliers to avoid shin Jiong, an area that the
US has accused China of human rights of issues, huge
backlash from China. Intel apologized for the trouble that it caused.
Why not stand up to China in that moment? If
(18:23):
you believe human rights are at risk, but we don't
know source out of Shinjion, You know, there's no reason
for us to be calling one out over any other.
We shouldn't be calling out individual things. You know, it's
not our job. Right in that respect. We're here to
build great chips, and we have a consistent global policy
or with regard to human rights expectations of our suppliers,
(18:44):
and that's what we've reinforced, and you know, we feel
confident that that's the right way to balance the views
that we would have across the globe in this regard.
Your customers are starting to make their own silicon Microsoft, Apple, Amazon, Alphabet.
How do turn back that trend? These companies are at
such scale now I can say, oh, we can hire
another hundred engineers. Let's go start a silicon project. And
(19:08):
that's part of my foundry strategy as well. That's right, Google, Amazon, Microsoft,
do it with us, right, come and use our foundry.
And when you do that, you know, when you show
up to use our foundry, right, we're going to allow
our I P to be used by your designers. Or
let's designed together, right, you know, and let's bring together
(19:31):
your innovations with our innovations and our leading edge process
technology and manufacturing capacity, so we are creating better products
that meet your unique needs. Tim Cook, CEO of Apple,
recently said on the earnings call that it's because of
the Apple design chips that more customers are buying Max.
That MAX sales went up for a year earlier. How
(19:55):
does it feel if Intel is being designed out? Yeah,
very sad because you know they designed a better chip
for their purposes than we were giving to them. So
what's my mantra to my team? Design a better chip? Right?
We have to create products and technologies that Apple says, huh,
that's better than I could have done myself. So you
(20:15):
think you can get that business back? Oh yeah, if
we do what I said, build better chips. Obviously, you know,
winning the microprocessor back. You know they've made those decisions
about every decade, you know, so I'm not expecting this.
We have a number of years to get our act together.
At that point, back you said Bitcoin was bad, design,
(20:36):
extreme and climate intolerant. Do you still feel that way? Indeed,
I do. A single ledger entry in bitcoin consumes enough
energy to power your house for almost to day. That's
a climate crisis right at that point. And the more
you use it. So if we produce a technology that
consumes that much energy, wow, that's not okay. And then
(21:00):
you sort of say most of the uses when I
said that, we're a listen, that doesn't mean it's not
a good technology, but we're not using it good yet. Well,
Intel's about to bring forward a blockchain chip. You know,
that's dramatically better. What about the metaverse? What's how are
you going to use the metaverse? Right? I don't know yet,
you know, and I do think that there's going to
(21:22):
be you know, a set of i'll say, business to
business applications in the metaverse, as well as consumer applications. Well,
in the consumer applications, the nearest embodiment of that would
be advanced gaming. So many of our graphics initiatives and
PC initiatives absolutely are going to place us in the metaverse.
We're also going to help to build the back end
(21:42):
cloud infrastructure for metaverse. We're moving into our lightning rounds.
We are going to move at a torrid pace to
be there's some rapid fire questions. Okay, um, I hear
you were a late night radio DJ. Is that true?
What were you spinning back in the day? Oh, this
was easy listening to music? Can you give us your intro?
This is Pat Gelsinger w FMZ Allentown. Good morning to
(22:06):
everybody in the Lehigh Valley. I love it. Um, what's
the latest TV? Show you've been. You know, we're running
out of things to watch for my wife and Landa.
So it was alias was our last been? Okay? Best
piece of advice that you would give someone in their
twenties relationships more important than results. Best piece of advice
for someone in their forties. Mentors, how much does faith
(22:30):
guide your decisions? Every day? Every way? I'm working for
something much bigger and more important than just being the
CEO of Intel. Speaking of that, you have how many
kids these days? Four kids, grandkids, grandkids? Are you getting
tapped to babysit? We're with the kids or have the
kids most weekends right between three different families. You know
(22:52):
my wife, you know she is like Grammy of the year,
if not the century. How do you do that? NVS
CEO at grandkids? Hey, Saturday's, Sunday's. You know we find
ways to fit it in. And as I would always say,
you know your pa, you know life doesn't make room
for your priorities. You make room for your priorities. I
hear you climb Mount kilivan Jar to raise money for
(23:13):
one of your charities. Do you still give away half
of your money going up every year? Favorite family meal
to cook for the kids and the grandkids. Oh, I'm
the grill master. Anything on the grill, you know, and uh,
you know, a great steak on the grill, you know,
salmon on the grill. We just had ribs on the grill.
I haven't waiting for this one. Do you still have
(23:35):
the vm ware tattoo? That a real tattoo. No, it
was one of those month long tattoos. My wife said
it fit ain't gone before our vacation. I'm ripping it
off of your arms. Since you said the farthest ahead
that you can see is ten years, take me to
ten years. We're gonna go on a growth journey as
(23:56):
a company that is going to establish us as one
of the law just companies on the planet. You know,
we will become a very substantial provider of foundry services.
I said, the number two company in the industry for
foundry overall major business. You know, we're going to be
the unquestioned leader in delivering compute to the planet, including
things like AI graphics, accelerated high performance computing. Will be
(24:21):
you know, the company that's creating entire categories like autonomous vehicles,
Tesla Intel unquestioned. So it's gonna be a tourd ten years?
Are you going to be here in ten years? Are
you gonna be with those eight grandkids? When we took
the job, we said there's a five year assignment, and
it's not what that we're done in five years, but
we knew it wasn't less than five years. So we'll
(24:41):
see where we are at the five year mark and
decide how much longer and how much more energy I have.
But right now we're quite enjoying the journey, all right, Intel,
CEO pack Alsinger, thank you so much for joining us.
Fascinating so much enthusiasm. It's been great to be here.
Thank you, Emily, Yeah, Bloomberg Studio at one point. I
(25:07):
was produced and edited by Lauren Ellis and Matthew Soto,
with special assistance from Mallorie Abelhausen and Ian King. If
you like our show, please share it or write a
review on Apple Podcasts or wherever you get your podcasts.
I'm Emily Chang, your host and executive producer. This is
Bloomberg
Thank you so much. So do you have a direct
line to the president? Now? Well, he's enthusiastic. Uh, you know,
obviously the project is significant and a lot of interest
around it, but you know it's also he says, hey,
I really want your views, you know, I want you
I want your views on the semiconductor industry, on the shortage,
you know, how to be you know, a more effective
(00:22):
partner with business, some of the geopolitical topics. So we're
we have a date plan to get together again. When
you talk to him, do you feel like he learned
something like? What did he take away from the conversation?
You know, I gave him a twenty minute of briefing,
you know, and some have said, you know is you know,
how how there is he But he was engaged. He
was asking questions, seeking to understand, excited about the benefits
(00:45):
to the region. And I'll tell you, Emily, this this
idea of the silicon heart land, it's just pulled on
something deeper in the nation. And uh, you know right,
you know, the plans have sort of been underwork and
all of a sudden, you know, hey, you know, let's
get this announced. The want to want a kick in
the pants for the chip sick. That's Intel CEO Pat
(01:05):
Gelsinger sharing details on his recent meeting with President Biden
at the White House. This after unveiling a plan to
invest tens of billions of dollars in the American heartland
of Ohio, create thousands of jobs, and bring chip manufacturing
back to US soil. It's part of an ambitious effort
to revitalize a lagging company and rest control of an
(01:25):
industry from Asia. But the question remains, will it work?
Joining me on this edition of Bloomberg Studio at one point,
oh Intel CEO Pat Gelsinger on his one year anniversary
of becoming CEO. He's returned to the company where he
spent the first thirty years of his career to shake
things up, and he hopes to restore the chip maker's legacy.
(02:00):
That's so good to be here with you. It's always
a joy, Emily, to be with you. Thank you for
having me and here at the Intel Museum, which is
obviously a sign of the legacy you're part of because
you worked here for thirty years. Yeah, yeah, thirty years,
you know, in eleven year vacation and then now back
for just about a year. So tell me about that
(02:20):
call when you got asked to come back as CEO
or coming up on the one year anniversary. It was
right before Thanksgiving a year plus ago, and the request
was would you consider joining the board? So I asked Michael, right, hey, Michael,
what do you think? Right? He says, hey, they need
to help go help him, and uh, yeah, you know that, Michael,
(02:41):
And uh, you know, the vm Ware board was okay, yeah,
you know they you know, with Michael supporting it, We're
okay with that. So why interviewed to join the board
for the month of December? They said, would you consider
being the CEO? So it just ruined my Christmas season
last year. Your eighth grandchild is on the way, and
(03:01):
you know, the vm Ware gig and I wanted to
get the public offering of vm We're done and everything.
So it was sort of like wow or wow, and
you know, how was that going to play? So three
weeks of chaos and then obviously the January fift announcement,
you know, and the idea of coming home, you know,
being a successful CEO, coming back now to the company
(03:22):
that I was born and raised in. As I like
to say, I went through puberty here I started so young,
and now the opportunity to lead and really help the
resurgence and re establishment of this iconic company that really
is the honor of a lifetime. Well, was it like
to return to a company that has so much history
which you were part of, but also knowing you needed
to shake things up? The first first staff meeting, you know, February?
(03:45):
You know they usually started at nine I started the
first one at seven am, and the first bullet of
the first slide. We will have a toward pace, right,
just setting them. Yeah, it's it's a new word in
the intel of vocabulary. The industry is moving rapidly, massive shortages. Uh,
the competitors are performing well. Hey, what we've been doing
(04:09):
ain't working. Team. We have to set a new course
for the future, and that's gotten underway very rapiding. We've
gotten a lot done over the first year. But you
don't change, you don't fix, you don't re establish. After
a decade of bad decisions and poor execution, It's gonna
take a while, but we're well on our way after
year one. He took a job in the middle of
(04:29):
a pandemic, in the middle of a supply crisis. Two
themes that are still with us today. If you could
give yourself an honest one year report card, what would
it say, give yourself a grade? Well, let me give
you two grades. Let me give you two grades. The
board gives me an A. Myself, I give myself an
A minus. Right now, in some regards, we're ahead of
(04:49):
where I thought we'd be. In some areas were not
as far as I thought we'd be. And it really
is more a statement of the massive challenge in front
of us. And we still got analysts out here. Someone
piss me off, right, you know, I call them my
bears and my perma bears at that and sort of say, yeah,
it's the right strategy, pat, but I'm not sure if
(05:10):
I need to invest for a year or two. You
know yet you know whence you're going to start materializing
in the marketplace as well. So good progress. It's a
good year behind us, and people are really getting excited
about the new old. Do you ever have it out
with the perma bears? Of course, you know, we'll debate
on different aspects, and hey, I appreciate the virgent views.
(05:33):
You know, that's part of the intel culture, right, you know,
Andy would argue everything as I would say, if you
were right with Andy, you were wrong. Well, you know
something about hard work because you grew up on a
farm Robson. Yeah, I say, when you know, between Redding
and Hershey halfway as rob a zone and we were
five miles outside of town. So when you got nowhere,
(05:55):
we were five more miles. But tell me about your upbringing.
How do you go from farmer in the bile of
Pennsylvania to engineer in Silicon Valley. My dad number nine
of ten kids, and Grandpa said, you know, we have
enough farms in the family. Just work with your siblings.
I'm the oldest boy. Had we had a farm, I'd
(06:15):
be the farmer, because that's what the oldest boy does.
Sixteen years old, accidentally took a scholarship exam and one
so I ended up, you know, having the opportunity to
go get a technicians degree, you know, community college. And
so at sixteen years old, skipped my last year and
a half of high school, finished my associate's degree, and
(06:37):
Intel came interviewing for technicians. So here I am eighteen
years old. Intel on the West Coast invites me to
come for an interview. Never been on an airplane, never
been to the West Coast. How long do you think
it said took for me to say yes offline to California, right,
It was like to nano seconds and they offered me
a job. And the interviewer said, you know, in the
(06:59):
interview he said smart, aggressive, arrogant, he'll fit right in.
You actually became the chief architect of the processor Intel processor, right, yes, yes,
And you had to pitch that to Steve John. I
want to hear about that meeting. You know, Jobs and
Andy they had argued early and Jobs went off on
a different path, right, And because of that that we're
(07:22):
using other microprocessors. And so I tried to convince Steve
come back to Intel, right, So, and I tried to
sell him in the three D six. He sort of
threw us out. I tried to sell him in the
forty six, and he threw us out at the time.
And eventually we want him over with the Centrino products
some number of years later. But you know, it was
(07:43):
also his insatiable detailed demand for engineering and industrial engineering excellence,
you know, And to me, that's just what set him apart.
(08:04):
This is my conversation with the CEO of Intel, Pat Gelsinger,
coming up, how the chip Giant plans to boost production
to meet a surgeon demand by making bowl bets in
the foundry business and new product lines. But can the
company pull it all off? And at once we discussed
Gelsinger's vision to bring manufacturing back to the United States.
I'm Emily Chang, this is Bloomberg Studio one point out,
(08:27):
stay with us. You became Intel's first CTO. When did
you know you wanted to be a CEO? That you
wanted something more? So in my twenties, I had my
first patent, I had my uh first book being written,
(08:50):
Programming the six It was a best seller, Emily right,
you know, had you know, gotten to be a VP
of the company right at the youngest VP ever? And
it was like, okay, what do I want to do next? Right?
And then through that was sort of the soul searching time.
And I wrote my mission statement that said become CEO
of Intel. And you know, here I am six year
(09:13):
olds being You've got been kidding me? Right, you know
what are you talking about? And but it became this
driving force in me that I'd be in meetings with
Andy Grove, Bob Noise sort of. I was armchair CEO
ing for a decade and a half as I'm sitting
in the room, you know, with these industry legends, and
(09:33):
all the time it was making me better. A lot
of people thought you would be a shoeing for the
CEO job when that job came open. So why did
you leave if this was your dream job? Yeah? You know,
there was a period of time under Odeline. He's a
leadership where he had a different view of leadership, different
view of what he wanted his successor it's to look like.
(09:53):
And you know, literally I was nudged out of the
company at the time and I was pushed out. Let's say,
you know somewhere between those two. You know that eleven
year period. By the way, Steve Jobs was outside of
Apple for eleven years, right, And there's something I'm trusting. Yeah,
you know, being away and I call it the death
(10:13):
of a vision, your period where you really have to
sort of look and say, Okay, why am I pursuing this?
Why wasn't I ready for that job? Out of these circumstances,
What am I going to learn? I've also seen the
vm Ware and the Dell and the e MC culture
up close. I just feel so much more equipped now
and had I stayed on the linear path to CEO,
(10:36):
I wouldn't have been the leader that I am today.
So those eight years as CEO of vm ware hugely value.
You wouldn't change a thing. I wouldn't change a thing, right,
And I learned the value of software, and hey, and
I's gonna do a whole lot more software in the future,
I promise you. But it was also a period of
personal development as well, developing humility, confidence, insights on how
(11:00):
to be a leader at this scale. Moore's law has
guided the development of the chip industry for decades. It's
not a law per se, but it's been critical to
the development of semiconductors. We might even go super Moore's
Law this decade. And you know four reasons I said
this case. We know how to build transistors that we
can see them scale for the next decade. We have
(11:22):
power delivery. You know, how do you get the power
into and out of the chip with our power via technology. Third,
we have the lithography. We also see that packaging will
called two and a half and three D, which is
becoming much more like wafer building as we look to
the future. So here we are a hundred billion transistor
chip will be our largest chip that we do today,
(11:43):
or ponte Vecchio for high performance computing. By the end
of the decade, we will deliver the trillion transistor chip.
And I just say, you know, with utter confidence, I
sit here and say, my team's gonna make that happen.
So industry, buckle up, Hang on, we are going for
a ride. So what happens after a decade? I mean,
do you think Moore's law can continue forever? To be
(12:05):
Moore's Law has always been about a decade right where
we can see in front of us the core technologies,
the barriers. You know, we're lining up the things that
will allow us to do it. So five years from now,
we'll have the next interview, Emily, and you'll say, are
you still good for a decade? And I hope to
be able to answer that question. Yes. So we have
a date in five years there we go absolutely. Um,
(12:25):
your strategy involves doing multiple things that Intel has never
been able to pull off before at the same time
moving into boundary for example, why do all of these
things at once? These are reinforcing strategies. It's not like
this one is in conflict or separate from the others,
but they are making each other better. And let's talk
about the foundry as an example of that. If I
(12:48):
open my foundry doors up, that means I have customers
benchmarking my process technology every day. Right, I'm not an
internal guy anymore. Instead of just saying here's my chip
or you and go to external foundries, I'm gonna say,
let's go together and we'll bring some of your stuff,
will optimize some of our stuff. Also, some of the
new business areas that were launching. Hey, we've been in
(13:10):
internal graphics forever. You know. Now we're going to do
discrete graphics. We're gonna build on things that we're already
doing and doing well. Now. Investors seem to be really
excited about the ambition, the speed, the aggression, that the
torrid pace, if you will, But they're not excited about
how much it's going to cost. And they want to
know about margins. And I know you've said five years
(13:30):
that's when you know those historically high margins will return.
That's right. It's going to be at a couple of
years of investment. And I am proud of making those investments.
We're not being managed on a quarterly Wall Street view right.
We are investing for a long term return and I'm
pretty darn proud of that. And you've budgeted up to
twenty eight billion dollars here, but your rival Samsung t SMC,
(13:52):
they're planning to spend way more than that. So is
there a chance this could cost even more than you're planning. Well,
what we've said, you know, we've said, you know, twenty
eight billion four this year, and it could go up
next year in the year after. This is big business,
This is big capital investments. This is a big manufacturing expansion.
We're pretty proud of the position. And boy, having doubled
(14:15):
my you know, my capital investments here and year. Hey,
we're not being bashful about the big steps forward that
we're taking. And with the announcements that we've laid out,
you know, we believe that we'll be back in fundamental
process leadership. So I think I saw you wearing a
Christmas sweater taking some shots at Lisa, Sue and a
d I believe you said they're already in the rear
(14:36):
view mirror. They're never going to be in the windshield again.
I asked her about this, and she she said, you know,
we're playing our own game. And we feel good about it.
She didn't even say the word Intel. What's your reaction
to that. Well, Lisa's done done a good job with
a m D as a company, and hey, you know,
I think we're back to a leadership position in the
client and uh server. Hey, we've got a little bit
(14:58):
more work to do, uh in that area. Is it
possible the industries in an arms race that will lead
to spending itself into an oversupply. I mean that has
happened before. We we we've looked at this very carefully.
And the digitization of everything. Tell me what aspect of
your life, Emily, isn't becoming more digital? Well, I'm trying
(15:21):
to prevent that. But yeah, you know, and COVID has
accelerated that. The industry cost five billion dollars last year
the semiconductor industry overall, and estimates are a trillion dollars
a doubling by the end of the decade. At that point,
I believe those estimates. It's not that there's not going
(15:42):
to be some blips and turns on the way, and
the majority of that is driven by leadership process technology,
of which only three companies can satisfy that need. Intel Samsung, TSMC,
and we are destined to grow faster than the market
to accomplish that objective. Over that time, you're listening to
(16:13):
my conversation with Pat Elsinger, Intel CEO up next. To
regain the throne, Intel has to fend off stiff competition
from rivals like TSMC and Samsung, companies that are getting
significant funding support from their governments, and tech giants like
Apple and Amazon boxing Intel out to design their own chips.
(16:34):
Can Intel turn back the time? That's next? I'm Emily Chang,
this is Bloomberg Studio. At one point, Oh, do you
feel you're getting as much support as your Asian rivals
are getting from their governments? You know, I think in
(16:56):
the past clearly they've gotten more right, unquestionably, and I
think we've seen over the last number of months is
really that the entire political uh infrastructure in the US
realizes how critical this is. This isn't just any industry, right,
This is the heart of what the automotive industry needs,
(17:16):
of what the industrial industry needs, what the medical industry needs,
the consumer industry, the cloud industry. Every one of those
relies on semiconductors. The national security relies on semiconductors. This
is a priority for the nation. Well, speaking of national security,
tension between the US and China is escalating daily. The
US is your home market, China is your biggest market.
(17:39):
Isn't that a risk to Intel's future? The US China
relationship now very critical? Big market for US. So you
know we're in China. We're navigating that carefully. US global
market big important for US. And I'll say, you know,
how do you navigate that carefully? Right? Requires you to
be deaf, thoughtful, engaged with the police, dical leaders, the
(18:00):
business leaders on both sides. Definitely consumes a lot of
our energy and we have to navigate it well. Intel
asked suppliers to avoid shin Jiong, an area that the
US has accused China of human rights of issues, huge
backlash from China. Intel apologized for the trouble that it caused.
Why not stand up to China in that moment? If
(18:23):
you believe human rights are at risk, but we don't
know source out of Shinjion, You know, there's no reason
for us to be calling one out over any other.
We shouldn't be calling out individual things. You know, it's
not our job. Right in that respect. We're here to
build great chips, and we have a consistent global policy
or with regard to human rights expectations of our suppliers,
(18:44):
and that's what we've reinforced, and you know, we feel
confident that that's the right way to balance the views
that we would have across the globe in this regard.
Your customers are starting to make their own silicon Microsoft, Apple, Amazon, Alphabet.
How do turn back that trend? These companies are at
such scale now I can say, oh, we can hire
another hundred engineers. Let's go start a silicon project. And
(19:08):
that's part of my foundry strategy as well. That's right, Google, Amazon, Microsoft,
do it with us, right, come and use our foundry.
And when you do that, you know, when you show
up to use our foundry, right, we're going to allow
our I P to be used by your designers. Or
let's designed together, right, you know, and let's bring together
(19:31):
your innovations with our innovations and our leading edge process
technology and manufacturing capacity, so we are creating better products
that meet your unique needs. Tim Cook, CEO of Apple,
recently said on the earnings call that it's because of
the Apple design chips that more customers are buying Max.
That MAX sales went up for a year earlier. How
(19:55):
does it feel if Intel is being designed out? Yeah,
very sad because you know they designed a better chip
for their purposes than we were giving to them. So
what's my mantra to my team? Design a better chip? Right?
We have to create products and technologies that Apple says, huh,
that's better than I could have done myself. So you
(20:15):
think you can get that business back? Oh yeah, if
we do what I said, build better chips. Obviously, you know,
winning the microprocessor back. You know they've made those decisions
about every decade, you know, so I'm not expecting this.
We have a number of years to get our act together.
At that point, back you said Bitcoin was bad, design,
(20:36):
extreme and climate intolerant. Do you still feel that way? Indeed,
I do. A single ledger entry in bitcoin consumes enough
energy to power your house for almost to day. That's
a climate crisis right at that point. And the more
you use it. So if we produce a technology that
consumes that much energy, wow, that's not okay. And then
(21:00):
you sort of say most of the uses when I
said that, we're a listen, that doesn't mean it's not
a good technology, but we're not using it good yet. Well,
Intel's about to bring forward a blockchain chip. You know,
that's dramatically better. What about the metaverse? What's how are
you going to use the metaverse? Right? I don't know yet,
you know, and I do think that there's going to
(21:22):
be you know, a set of i'll say, business to
business applications in the metaverse, as well as consumer applications. Well,
in the consumer applications, the nearest embodiment of that would
be advanced gaming. So many of our graphics initiatives and
PC initiatives absolutely are going to place us in the metaverse.
We're also going to help to build the back end
(21:42):
cloud infrastructure for metaverse. We're moving into our lightning rounds.
We are going to move at a torrid pace to
be there's some rapid fire questions. Okay, um, I hear
you were a late night radio DJ. Is that true?
What were you spinning back in the day? Oh, this
was easy listening to music? Can you give us your intro?
This is Pat Gelsinger w FMZ Allentown. Good morning to
(22:06):
everybody in the Lehigh Valley. I love it. Um, what's
the latest TV? Show you've been. You know, we're running
out of things to watch for my wife and Landa.
So it was alias was our last been? Okay? Best
piece of advice that you would give someone in their
twenties relationships more important than results. Best piece of advice
for someone in their forties. Mentors, how much does faith
(22:30):
guide your decisions? Every day? Every way? I'm working for
something much bigger and more important than just being the
CEO of Intel. Speaking of that, you have how many
kids these days? Four kids, grandkids, grandkids? Are you getting
tapped to babysit? We're with the kids or have the
kids most weekends right between three different families. You know
(22:52):
my wife, you know she is like Grammy of the year,
if not the century. How do you do that? NVS
CEO at grandkids? Hey, Saturday's, Sunday's. You know we find
ways to fit it in. And as I would always say,
you know your pa, you know life doesn't make room
for your priorities. You make room for your priorities. I
hear you climb Mount kilivan Jar to raise money for
(23:13):
one of your charities. Do you still give away half
of your money going up every year? Favorite family meal
to cook for the kids and the grandkids. Oh, I'm
the grill master. Anything on the grill, you know, and uh,
you know, a great steak on the grill, you know,
salmon on the grill. We just had ribs on the grill.
I haven't waiting for this one. Do you still have
(23:35):
the vm ware tattoo? That a real tattoo. No, it
was one of those month long tattoos. My wife said
it fit ain't gone before our vacation. I'm ripping it
off of your arms. Since you said the farthest ahead
that you can see is ten years, take me to
ten years. We're gonna go on a growth journey as
(23:56):
a company that is going to establish us as one
of the law just companies on the planet. You know,
we will become a very substantial provider of foundry services.
I said, the number two company in the industry for
foundry overall major business. You know, we're going to be
the unquestioned leader in delivering compute to the planet, including
things like AI graphics, accelerated high performance computing. Will be
(24:21):
you know, the company that's creating entire categories like autonomous vehicles,
Tesla Intel unquestioned. So it's gonna be a tourd ten years?
Are you going to be here in ten years? Are
you gonna be with those eight grandkids? When we took
the job, we said there's a five year assignment, and
it's not what that we're done in five years, but
we knew it wasn't less than five years. So we'll
(24:41):
see where we are at the five year mark and
decide how much longer and how much more energy I have.
But right now we're quite enjoying the journey, all right, Intel,
CEO pack Alsinger, thank you so much for joining us.
Fascinating so much enthusiasm. It's been great to be here.
Thank you, Emily, Yeah, Bloomberg Studio at one point. I
(25:07):
was produced and edited by Lauren Ellis and Matthew Soto,
with special assistance from Mallorie Abelhausen and Ian King. If
you like our show, please share it or write a
review on Apple Podcasts or wherever you get your podcasts.
I'm Emily Chang, your host and executive producer. This is
Bloomberg
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