Intel CEO Pat Gelsinger doubled down yesterday on his company’s apology for singling out forced-labor practices in the Xinjiang region, where the Chinese Communist Party is carrying out crimes against humanity and genocide against Uyghurs and other minorities.
Gelsinger was testifying in front of a Senate committee to voice his support for a bill that would provide semiconductor manufacturers with over $50 billion in subsidies to shore up U.S. supply chains amid the geopolitical competition with China.
He and other Intel executives have expressed interest in working to ensure U.S. supply-chain security, and the company announced a $20 billion investment earlier this year in an effort to build two new chip factories in Ohio. However, his latest comments are sure to call attention to his efforts to justify Intel’s continued business in China — and the unsavory moral compromises necessary to maintain it.
Under questioning by Senator Rick Scott (R., Fla.) he defended Intel’s apology from last year for singling out forced-labor abuses in Xinjiang in a letter to Intel’s suppliers after Congress passed a bill barring Uyghur-forced-labor imports in December.
🚨WATCH🚨 @Intel just DOUBLED DOWN on its apology to companies in Communist China over U.S. sanctions to stop slave labor.
Why on earth would we give Intel BILLIONS in taxpayer-funded handouts? pic.twitter.com/3bIIlCgPCq
— Rick Scott (@SenRickScott) March 23, 2022
“This is a global supplier letter that we put in place to minimize risks to manage our supply chain globally. No forced labor, no slavery, no other inappropriate actions,” said Gelsinger yesterday. “A global supplier letter inappropriately included a specific reference to one region in the world.”
“It was a global letter, covering many parts of our global supply chain that touches almost every country in the world. That was inappropriate,” he continued.
Gelsinger said yesterday that the letter clarifies that “we do not support slave labor anywhere in the world.” He clarified earlier this year that Intel “never had” sourced materials from the Xinjiang region.
In the supplier letter, which Intel published last December, Gelsinger informed Intel’s suppliers that the company is “required to ensure that its supply chain does not use any labor or source goods or services from the Xinjiang region.”
After an uproar from Chinese Internet users and Chinese propaganda outlets, Intel issued a Chinese-language apology on Chinese social-media platforms. “We apologize for the trouble caused to our respected Chinese customers, partners and the public. Intel is committed to becoming a trusted technology partner and accelerating joint development with China,” that statement read, according to Reuters.
Soon after that, the language specific to Xinjiang was scrubbed from a version of the notice posted to Intel’s website, replaced by guidance on forced labor more generally, without specific mention of the region.
Asked about this incident during an Atlantic Council event in January, Gelsinger defended the apology, saying that Intel had “no reason” to call out one particular region. National Review reported on the tech executive’s comments at the time.
During yesterday’s hearing, Scott also pressed Gelsinger on Intel’s continued operations in China, saying that the mass exodus of U.S. firms from Russia amid the invasion of Ukraine highlights the dangers of doing business in China as the Chinese Communist Party threatens to invade Taiwan.
“As the CEO of a company shouldn’t you be going to your board and saying, ‘Hey, look, we got a big problem here because the American public, people who live in Europe, are gonna say, hey, you got to get out of China because they’re about to invade Taiwan’?” asked Scott. “And when they do, what are you going to do when you have all these operations in China, and the expectation is you shut down?”
“Why wouldn’t you on your own, without getting a subsidy from the American government and American taxpayer, say, ‘I’ve got to get out of there right now’?” Scott continued.
Gelsinger replied that China’s semiconductor market makes up about half of the world’s market: “It’s the fastest-growing semiconductor market in the world. So if we’re here to be the largest provider of semiconductors in the world, we must be participating in the largest market.”
He also told Scott that “it will bother me enormously” if China invades Taiwan. “The concerns that I have around the geopolitical situation drive the passion and urgency to build this industry in the U.S. This is a core reason why we are here. We have allowed this industry to shift to Asia. It is time for us to get back on to American soil,” said Gelsinger, urging Congress to immediately pass the CHIPS for America Act (Creating Helpful Incentives to Produce Semiconductors).
The Senate and House have each passed their own versions of a broader industrial policy and counter-China bill, and the Senate is currently deliberating the House-passed America COMPETES Act. Although there’s widespread bipartisan support for the chip subsidies, some lawmakers have advocated provisions conditioning the money on demands that chip companies wind down their operations in China.
Gelsinger’s latest comments about China might make it more likely that senators land on a legislative text that restricts those companies’ ability to simultaneously expand their businesses in China and receive U.S. federal funding.