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Intel Corporation’s chief executive Mr. Patrick Gelsinger believes that it is unlikely China’s Semiconductor Manufacturing International Corporation (SMIC) will catch up with its global peers in the race to manufacture semiconductors with leading edge fabrication processes. Mr. Gelsinger made these remarks, in addition to those surrounding the company’s competition with chip designer Advanced Micro Devices, Inc (AMD) and Intel’s ability to manufacture a trillion transistor chip at the Credit Suisse technology conference earlier this month. During his talk, he also stressed on the importance of supporting U.S. chip companies due to Asian political instability.

Intel CEO Confident Company Can Regain Market Share Lost To AMD Over The Years

His talk at the event touched upon several topics including Intel’s recent datacenter market performance, its upgraded technology roadmap, future compound annual growth rate (CAGR) estimates and the current outlook in the semiconductor industry.

Mr. Gelsinger outlined that repeated incursions in Taiwanese airspace by China’s fighter jets presented a geopolitical risk to the semiconductor industry. The world’s largest contract chip manufacturer, the Taiwan Semiconductor Manufacturing Company (TSMC) is headquartered in the island and uses it to manufacture its latest chips and research and develop new technologies.

He would go on to repeat these comments at the Fortune Brainstorm Technology Conference later in the week. During the Credit Suisse event, the Intel chief stated that:

The executive also stressed that if Intel maintained its current innovation rate, it could easily make the world’s first trillion transistor chip by the end of this decade. He believes that:

How do you feel about having your sole source foundry capability in Taiwan right now? I mean, this is a geopolitical risk. And as we’ve argued since the beginning of my 10-year, the world needs a more resilient, geopolitically balanced supply chain. So we’re seeing a lot of enthusiasm to support us moving into that market.

Prior to this, he also indirectly hinted that it is impossible for China’s Semiconductor Manufacturing Corporation (SMIC) to catch up with its technologically advanced peers in the chipmaking world. SMIC, which is struggling to produce chips on a 7-nanometer (nm) process node, is China’s best chipmakers.

According to Mr. Gelsinger:

Finally, in best for last, the Intel executive also commented on his company losing market share to AMD. In response to a question about capital allocation expenditure over the next five years, the CEO replied:

We’re now in the cycle of basic business 101, that it’s a consolidation cycle, not an expansion cycle in the number of players in the foundry business.

He also expressed optimism on Intel’s ability to take away lost data center market share to AMD. While the latter continues to deliver strong growth in the area, Intel’s performance has been rather muted.

For data center, Mr. Gelsinger explained that:

 

But, AMD, we expect them to respond next year. So it’s going to be a little bit nip and tuck over the next couple of years. And, as you suggest, it’s going to be out a couple of years until we’re back to unquestioned leadership in the data center. It takes a bit longer in the data center side, the development cycles are longer. And as our process technologies get better and better, our server roadmap takes a little bit longer to take advantage of that.