Intel CEO stresses more U.S. chip production, fewer stock buybacks

Pat Gelsinger tells '60 Minutes' he expects chip shortage to last 'a couple of years'.

Intel Corp. plans to spend more money on building semiconductors and less on stock buybacks, the chip giant's CEO said Sunday.

In an interview with CBS's "60 Minutes" that aired Sunday night, Chief Executive Pat Gelsinger put some of the blame for the current global chip shortage on the fact that 75% of the world's semiconductor manufacturing takes place in Asia.

"Twenty-five years ago, the United States produced 37% of the world's semiconductor manufacturing... Today, that number has declined to just 12%," Gelsinger said, according to a CBS News transcript. "It doesn't sound good. And anybody who looks at supply chain says, 'That's a problem.'"

Gelsinger repeated his prediction that it'll take "a couple of years" before chip production catches up with demand, and said Intel is looking to build more of its chips in the U.S.

"This is a big, critical industry and we want more of it on American soil: the jobs that we want in America, the control of our long term technology future," he said.

Reporter Lesley Stahl poined out Intel has spent more on stock buybacks than research and development in recent years, but Gelsinger, who became CEO earlier this year, said that will change.

"We will not be anywhere near as focused on buybacks going forward as we have in the past," he said. "And that's been reviewed as part of my coming into the company, agreed upon with the board of directors."

Intel has lobbied the Biden administration to help revive domestic chip manufacturing through incentive programs, and the White House has proposed $50 billion to help the industry as part of its $2 trillion infrastructure plan.

In March, Gelsinger announced plans for a $20 billion expansion of Intel's chip-making facility in Arizona , and said Intel would not only start manufacturing a majority of its products in-house but it would also expand its use of third-party fabricators and lease out some of its fabs.

Intel shares $(INTC)$ are up 15% year to date, compared to the S&P 500's 11% gain this year.