Intel Corp. INTC -2.11% could see new business opportunities from a bifurcation of tech supply chains amid growing tensions between the U.S. and China, the chip maker’s Chief Executive Bob Swan said.
The U.S. and several other countries have limited or blocked Chinese telecom giant Huawei Technologies Co. from providing equipment for their 5G infrastructure over concerns about security and potential espionage—claims Huawei denies. Those constraints leave gaps that others—including Intel—could fill by providing the chips that power the superfast networks.
But Intel also illustrates how the intensifying battle between Washington and Beijing over tech dominance brings both risk and opportunity. The company is still a major supplier to customers in China, where its chips are used in personal computers, servers and a range of other devices.
“China is a big market for us, but at the same time Intel playing a broader role in 5G infrastructure is also an opportunity for us,” Mr. Swan said at the WSJ Tech Live conference, which was held remotely on Tuesday. Overall, he said, the company and the industry would benefit from free global trade.
Intel agreed Monday to sell its flash-memory manufacturing business to South Korea’s SK Hynix Inc. 000660 0.23% for $9 billion. That business has operations in Dalian, China, Intel’s only major chip-making facilities in the country.
Mr. Swan said Intel was selling the business to unlock capital to use on better opportunities in fast-growing areas such as 5G and artificial-intelligence computing.
Mr. Swan, who has been in the top job at Santa Clara, Calif.-based Intel around two years has presided over the company during an especially challenging period during its more than 50-year history. He inherited problems with making the smallest and most-cutting edge chips, which have persisted. Rival chip maker Nvidia Corp. has now surpassed Intel by market value.
The Intel CEO said Tuesday that he is trying to shift the Silicon Valley icon from being known mainly as the leading provider of central processing units, which go into personal computers and servers, toward a broader set of activities. Intel historically has had a commanding share of around 90% in central processors, but Mr. Swan said the metric he is more focused on is holding a 30% share in a much larger market for all kinds of chips.
Write to Asa Fitch at [email protected]
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Appeared in the October 21, 2020, print edition as ‘CEO Sees Opening Amid China Rift.’
