Intel [NASDAQ:INTC] Chief Executive Officer, Patrick Gelsinger, is in Beijing this week and will meet Chinese ministers in person, according to three sources familiar with the matter.
Gelsinger arrived in Beijing in the small hours today (11 April) the first source said. He met with Wang Wentao, the minister of the Ministry of Commerce (MOFCOM), in the morning, as per a post on the Ministry’s website.
According to the release, the commerce minister and Gelsinger exchanged views on topics, including Sino-US trade relationship, maintaining the security and stability of the global semiconductor industrial supply chain, and Intel’s development in China. Wang emphasized to Gelsinger that China will stick to its opening up policy. China’s development will provide a bigger market and new opportunities to multinationals including Intel, Wang said.
During the Beijing trip, the U.S chip maker’s boss is likely to have long-awaited and in-person meetings with ministers of several powerful agencies such as the economic planning regulator, the National Development and Reform Commission (NDRC), and the Ministry of Industry and Information Technology (MIIT), according to the first two sources.
It’s not clear if Gelsinger will meet the minister of the State Administration for Market Regulation (SAMR), according to the three sources.
Efforts are being made to schedule more meetings between Gelsinger and other Chinese agencies including SAMR, said the first source, adding that Gelsinger may have a chance to meet premier-level officials. The trip schedule is still being finalized.
The SAMR is still reviewing Intel’s USD 5.9bn acquisition of Israel-based analogue chip specialist Tower Semiconductor [NASDAQ:TSEM] despite the deal having cleared all other international regulatory approvals by mid-2022. The deal is taking place amid escalating Sino-US tensions much of which relate to the semiconductor sector.
Gelsinger’s China visit will last for three to four days, said the third source. The trip has been on the cards since China abandoned its zero-COVID policy in December, according to the first source. The rationale behind his visit is simply that the Chinese market is important to Intel, according to the first source. Revenue from China accounted for 27% of Intel’s total revenue in the fiscal year ending 31 December 2022, according to the company’s annual report.
Initially, Gelsinger had planned to visit Beijing and attend the China Development Forum (CDF), which is organized by the Development Research Centre of the State Council and took place on 25-27 March at the Diaoyutai State Guest House, according to the first source. CEOs of global hard tech giants such as Apple, Qualcomm, Broadcom and Samsung appeared alongside other global peers and Chinese ministers and officials as well as chief executives from Chinese central-level state-owned enterprises and financial institutions. Gelsinger did not make it due to scheduling conflicts, the same source added. His absence was not considered particularly remarkable despite the presence of many industry peers.
Gelsinger’s slightly delayed visit means he will be able to meet high-level officials in person, according to the first source.
The CEO may try to push forward SAMR’s review of Intel’s acquisition of Tower Semiconductor, a fourth source familiar with the matter said. But this will not be a top priority of his trip, the first source said.
The regulator’s review, which kicked off in June, was approaching the end of SAMR’s Phase III when the review clock was suspended in mid-December, as reported. SAMR’s review of the deal is yet to resume, according to the fourth source.
In January this news service reported that Intel had rebuffed speculation it was seeking US government approval to invest USD 1.5bn and expand semiconductor chip production in China as a way to gain approval for the Tower deal. A few weeks later Reuters reported Intel was considering a USD 1bn expansion of existing USD 1.5bn investment in Vietnam to expand chip testing and packaging. The report noted the sensitivity of the matter and said that Intel wants to be sure "further expansion abroad would not be seen as a hostile move by Washington, which is pushing to boost production of chips at home".
In late February, at an Shanghai event hosted by advisory firm Mavek and German enterprise software company SAP, representatives of US chip companies expressed concern about losing market share as they try to balance business interests in China with strict export controls on advanced semiconductors. Representatives of Intel China reportedly said the company hoped to be “rooted in China, serving China, developing together”.
Intel will hold its 1Q23 earnings call on 27 April
A spokesperson for Intel said, “Pat is in China this week, where he has a number of engagements planned, including keynoting Intel’s Sustainability Day event in Beijing.”
[Editor's note: Updated to include comment from an Intel spokesperson.]
