Speaking at the Aspen Security Forum, Intel CEO Pat Gelsinger defended his effort to continue selling advanced semiconductor chips to China.
This is a topical concern. On Monday, Gelsinger and the CEOs of Qualcomm and Nvidia lobbied the Biden administration to relax restrictions on Chip exports to China. Those restrictions reflect highly legitimate bipartisan concern that China will use United States chips to develop the People's Liberation Army's sensor and weapons targeting systems.
ARMY PRIVATE CHOSE A PARTICULARLY POOR TIME TO GO TO NORTH KOREA
Gelsinger sees it differently.
As he put it on Wednesday, "Right now, China represents 25% to 30% of semiconductor exports. Right, if I have 25% to 30% less market, I need to build less factories. Right? You know, we believe you want to maximize our exports to the world. We want to maximize selling fish, not fishing rods, right, you know, across the world, including China."
He continued, "You can't walk away from 25% to 30% and the fastest growing market in the world and expect that you remain funding the [research and development] and the manufacturing cycle that we've released ... This is strategic to our future, we have to keep funding the [research and development], the manufacturing, etc. Today, we have over 1,000 companies on the entities list, many of which have nothing to do with national security and nothing to do with security concerns in China."
Gelsinger's argument is a weak one.
For a start, his observation that "many" companies on the entities list (a U.S. government list of companies that U.S. firms are not allowed to deal with) have "nothing to do with security concerns in China" is patently false. Gelsinger is either a secret idiot (highly unlikely), or he knows full well that many of those companies are fronts for the People's Liberation Army and other elements of the Chinese state.
That said, Gelsinger's argument is also a greedy and hypocritical one. After all, Intel is a key beneficiary of the CHIPS Act that was enacted last year. That legislation will provide billions of dollars in subsidies for the development of the domestic semiconductor Chip manufacturing base. Gelsinger would now have us believe that if his access to China is restricted, he will no longer invest in research and development.
But here's the thing: he will continue to invest in research and development.
Gelsinger will do so because even if we accept his assertion that China represents a major market for Intel, his company still has many other domestic and foreign markets. Intel will continue to engage in significant research and development because it is one of the leading technology firms on the planet. It wants to remain in that position because profit flows from that position. Retaining that position requires research and development.
Intel's duty to its stockholders means that its first obligation is to long-term profitability, not Gelsinger's economic-political theory. And while restrictions on chip exports to China may reduce Intel's short-medium term research and development budget and its profits, it will not bury the company over the long term.
Moreover, when Gelsinger portrays the retention of expansive China trade as the exigent determinant of whether the U.S. will continue to lead in the technology space, he is only looking at the tip of the strategic iceberg. Below the surface, as shown by Congressional and White House concern, China's strategic challenge is measured by its foreign policy ambition and rising military threat.
What Gelsinger ignores is that Xi Jinping doesn't want Intel's chips to build his economy, but rather to build his economy in service of his ultimate objective: global political and economic hegemony. If not, why is Xi so obsessed with economic regulations that reinforce the Communist Party's authority?
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
This is the reason Xi threatens near-term war with Taiwan, claims ownership over the South China Sea, steals vast amounts of technology, and is building out an advanced nuclear force.
What Gelsinger really wants is the freedom to help Xi effect that agenda because doing so will maximize Intel's near-term bottom line. It's tragic that the self-described "Christian farm boy" doesn't care if Intel's chips are used to guide missiles onto the heads of young American sailors.