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Intel CEO on the chip industry: You can't be a little player

·Anchor, Editor-at-Large
·2-min read
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Intel CEO Pat Gelsinger may be locked and loaded on bulking up the chip powerhouse as it seeks to dethrone rivals Taiwan Semiconductor Manufacturing and Samsung in the business of making semiconductors for other tech giants.

"It's a big, expensive industry to play in. The R&D demands are extraordinary, the capital demands are extraordinary for it. So you can't be a little player," Gelsinger said on his appetite for M&A in the foundry business on Yahoo Finance Live

Intel (INTC) committed itself to making chips for other companies in a bid to increase industry capacity back in March near the start of Gelsinger's tenure as CEO. As part of that ambition, Intel is investing $20 billion to build new factories in Arizona

ANTALYA, TURKEY - DECEMBER 6: Intel processor chip for Samsung is seen in this illustration photo in Antalya, Turkey on December 06, 2019. (Photo by Mustafa Ciftci/Anadolu Agency/Getty Images)
ANTALYA, TURKEY - DECEMBER 6: Intel processor chip for Samsung is seen in this illustration photo in Antalya, Turkey on December 06, 2019. (Photo by Mustafa Ciftci/Anadolu Agency/Getty Images)

More recently, the WSJ reported that Intel was eyeing a purchase of chipmaker GlobalFoundries for $30 billion. GlobalFoundries is among the biggest specialist players in the chip industry. The company was spun out of Advanced Micro Devices in 2008. It still counts AMD as a key customer, making any potential purchase by Intel (a rival to AMD) tricky. 

Gelsinger declined to comment on the speculation around GlobalFoundries. 

But it's somewhat clear Intel may have to pull the trigger soon on buying a foundry. 

Intel said Monday it will begin making chips for Qualcomm and Amazon. Gelsinger told Yahoo Finance Live the company has 100 companies that have shown interest in using Intel to manufacture their chips.

"Overall the foundry business today is over a $100 billion market So we are going into a large market. I have set a goal that by the end of the decade we want to be the number two player in that market," said Gelsinger. "We expect this becomes a large growth opportunity for Intel over that period."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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