End user Insight: Intel’s take on AI, tariffs, and the future of semiconductor supply chains

Guy Bar-Ner is a Director of Supply Chain supporting Intel’s worldwide construction activities. At Ultrafacility 2024, Guy presented on how automation and Ai help support Intel in tackling some of the industry supply chain challenges. A year on, Guy spoke to the Ultrafacility team to provide an update on Intel’s strategy and a current picture of semiconductor supply chains.

How would you describe the current state of the semiconductor supply chain in 2025? What are the major shifts Intel has observed recently?
Materials and equipment lead times have come down significantly since COVID, almost back to normal. However, equipment prices are impacted by tariffs. It's not clear exactly how big the impact, but the expectation is that we're going to see about 7% increase overall in terms of prices.

Significant labor issues continue to exist, with some improvement over the last year. Laborers, welders, and electricians are in particularly high demand. The forecast continues to see severe labour shortages over the next five years. The industry is very much engaged in working with universities and high schools to solve this, as well as trade schools and with the unions, trying to lure more people to those trades.

Which are the most significant external factors currently impacting Intel’s supply chain decisions?
Today, it's about the tariffs. When you look at the geopolitical situation overall, there's always something, but I would say the tariffs are driving supply chain decisions in terms of alternate suppliers, for example, more local suppliers.

When you're doing your sourcing strategies, you estimate the total landed cost, not just the cost of whatever you're buying. This means also looking at where they are in terms of the world, and the impact of the tariffs. At Intel we've been trying to diversify and find alternate suppliers anyway, so there isn’t a significant impact, it has just increased the sense of urgency.

What strategic changes has Intel made to build more resilient supply chains?
When we talk about resilient supply chain, a lot of it is about the planning and getting ahead, as well as building strategic relationships with key suppliers so that you know you have people you can work with (both when times are good and when they are not). I wouldn't say this is anything necessarily new, these are things that we've been doing for years.

What are the most critical internal challenges in operational planning?

That’s an ongoing journey; it's not something that anybody is going to solve within a day, specifically around inventory management. That is really about having the visibility to downstream inventories, with distributors, with the general contractors in the construction world, with the trades, with the manufacturers. Even if you have visibility to your own inventory, which not all companies do, the real struggle is getting visibility to any kind of downstream inventory.

In terms of improving planning and connecting all the systems, it is continuous, it’s not going to end in 2026 or 2027. But AI is having a huge impact and making it easier to find solutions and options that you can act on. AI is the single biggest game changer in the systems area.

How is Ai and digital technology currently supporting supply chain strategies?
Even if you don't have visibility to all the data you need, using AI agents and connecting them to the different systems and data points makes it much easier to do your job. Instead of having to search for data, you can ask a simple question to an AI agent, and it spits out the answer or the options.

Are fabs more interested in retrofitting AI into existing digital systems or investing in entirely new, off the shelf AI solutions?

Right now, at least, we’re looking at an add-on to existing systems to simplify the process. Replacing systems is a whole different ball game, it’s complicated, costly, and time-consuming. I’m sure there are AI-powered platforms available and more in development, but for now, our focus is on adding an extra layer.

Is Ai currently being used more actively to automate supply chain management, do you see this role increasing in the future?
Yes 100%, especially around the planning side of it. It can help take schedules, milestones, and easily build out what your materials and equipment should look like, and lead times based on different factors. It can create a plan much more easily than how we do it today.

However, I don't think we're close to having non-humans. The AI could absolutely build out the plan, but you still need humans to look at it and improve it.

Do you see modular design, off-site manufacturing, or other construction innovations as game-changers for easing supply chain pressures?
Yes, absolutely, it is something we are doing now. Offsite manufacturing and modularization are huge and the more we can do with that, the better.In terms of modularization, it means being able to drop large areas in like Lego. In the construction world, the more you can take people off the job site the safer it is. In addition to safety, lead time is crucial. If coordination is handled well, what you need arrives just in time, right when it’s needed on site, with the people ready to install it. That makes the process much smoother.

It’s not always cheaper, there’s a trade-off. Costs can increase since you need an offsite manufacturer and a laydown yard. These are additions, not replacements, because the onsite space still exists, you’re adding things. You’re also combining multiple supply chains, with different suppliers needing to deliver to the outsourced manufacturer at the same time to build what’s required. In some ways, that makes things more complicated. Off-site or not, you don’t want to hold months of inventory, which only adds to the complexity.