Following his unexpected return to the CEO role at Intel, last week Pat Gelsinger outlined Intel’s strategy to recover its position as the world’s leading provider of semiconductor technology, and to drag the US up with it. For the past two chip generations Intel has struggled to ramp its manufacturing process to full production, and has lost the kudos of ‘technology leadership’ to the leading semiconductor foundry companies - TSMC and Samsung. Gelsinger plans to turn that around by focusing on three main areas: Ramping its 7nm process – with the first client CPU parts now expected in 2023 The launch of a new Intel business group – Intel Foundry Services - to set up a US based foundry service. This facility will offer fabless chip companies access to Intel’s manufacturing capabilities, and Intel’s x86 IP. The major electronic design automation (EDA) companies, Cadence and Synopsis, are on board to support Intel’s new service, and a wide range of industry players expressed support. Plans to invest $20B in two new Arizona fabs, and the expectation of further fab investments in EMEA to be announced later in the year. Gelsinger also announced a collaboration with IBM to jointly develop future semiconductor processes and packaging technology. Put together these announcements from Intel underpin a commitment to recover its position as a leader within the semiconductor industry, and establish a long term plan for a viable US based semiconductor foundry service. This will be welcomed by many Americans (both politicians and industry players) worried about the current industry imbalance, with the majority of the world foundry services concentrated in Asia. This new strategy will, no doubt, invigorate Intel’s internal engineering organizations. However, the company still faces near term challenges, with a number of its major customers committed to developing their own chips and moving away from Intel’s x86-based designs. It will be at least 3 years before the impact of this new strategy is felt across the industry, but Intel has taken it upon itself to reassert US dominance in semiconductor technology and there is too much at stake from a US (and Western) national security perspective for it to fail. We therefore expect significant government backing, and a political push, clearing the path for Intel to succeed.