Intel CEO suggests that semiconductors are akin to oil, and increasing production in the US can prevent global crises.

• In a CNBC interview on Wednesday, Intel CEO Pat Gelsinger likened semiconductors to oil before testifying to the U.S. Senate.
• "For the last five decades, geopolitics have been shaped by oil reserves. However, Gelsinger emphasized that the location of factories for a digital future is now more crucial," said Gelsinger.
• In recent years, Intel has been allocating vast sums of money to establish semiconductor manufacturing facilities in both the United States and Europe.

On Wednesday, CEO Pat Gelsinger compared semiconductors to oil, implying that computer chips will be crucial in shaping global politics in the future.

"For the past five decades, oil reserves have shaped geopolitics. However, Gelsinger emphasized in an interview on CNBC's "Squawk Box" that the location of factories for a digital future is more crucial. He suggested building them where we want them and shaping the world we want to be a part of in the U.S. and Europe."

Semiconductor manufacturing factories, or fabs, are primarily located in Asia, with Taiwan being the hub for the majority of chip production. This has sparked security concerns due to China's increasing military presence near the island, which Beijing claims as its own.

The production of semiconductors has been disrupted during the Covid pandemic, resulting in a shortage of these chips, which are used in a wide range of electronic devices, including smartphones, cars, and washing machines.

Intel has been expanding its chip manufacturing operations under Gelsinger's leadership, with recent investments in new fabs in the U.S. and Europe, as well as the commencement of work on two factories in Arizona last year.

The Santa Clara-based company, a prominent player in Silicon Valley's early days, has been advocating for legislation that includes government funding for semiconductor production to officials in both Washington and Brussels.

Gelsinger made comments in favor of a $52 billion subsidy plan before testifying before the U.S. Senate on Wednesday.

The current CEO of Geslinger, a cloud computing company, is not the first to compare semiconductors to oil. However, his comments have gained more attention due to the increase in crude oil prices this year, which was caused by the Russia-Ukraine war and concerns about supply disruptions.

Geopolitical tensions have resulted in increased fuel prices, causing American consumers to express concerns about their impact, as seen in the energy crisis of the 1970s.

While highlighting the economic consequences of Russia's attack on Ukraine, Geslinger also expressed concern for the humanitarian impact.

The Russia-Ukraine conflict does not directly affect semiconductor supply chains, but it highlights the need for geographically balanced and resilient supply chains in the digital future, as stated by the speaker.

"Semiconductors are essential for all digital technology, and it is crucial to build fabrication plants (fabs) where we need them."