The semiconductor space is experiencing upheaval. Demand for chips is high, and the industry is recovering from supply chain issues that plagued it during 2020. Internationally, China’s efforts to become a leader in the semiconductor space are putting pressure on other firms, but not in a good way. In the U.S., things are changing too. In July 2020, after former Intel CEO Bob Swan announced a product delay, Nvidia surpassed Intel as the largest chipmaker in the U.S. (according to market cap values) for the first time. Intel has spent a lot of time in the top spot, jockeying at times for the position with chipmakers like Qualcomm, which announced in January it would acquire chip startup Nuvia. Also in January, Intel replaced Bob Swan with Pat Gelsinger as CEO, supposedly after being pressured to do so.
In a recent webcast, Gelsinger made some important announcements that will drive the chipmaker into the future—a future being shaped by changes that, in many cases, were put into motion in the past 12 months. Intel’s new CEO provided an update on the company’s 7-nanometer technology. Gelsinger says the company expects to tape in 7nm compute tiles in Intel Meteor Lake processors as early as the second quarter of this year for prospective release in 2023.
Gelsinger also announced the next iteration of Intel’s IDM (integrated device manufacturing) model. The IDM 2.0 Strategy for Manufacturing, Innovation, and Product Leadership includes a nearly $20 billion investment in its own internal factory network. Specifically, the company will be building two new fabs in Arizona. “We have always been in the business of defying physics and building the future, and that’s not going to change,” Gelsinger said in the webcast. “Intel is and will remain a leading developer of process technology, a major manufacturer of semiconductors, and the leading provider of silicon globally.”
The second part of IDM 2.0 is Intel’s plans to expand its third-party foundry capacity and create IFS (Intel Foundry Services), a standalone foundry business. Gelsinger says he expects Intel’s engagement with foundries to grow in both size and scope. “This includes manufacturing a range of modular tiles on advanced process technologies, including products at the core of our compute offerings for both client and data-center segments,” Gelsinger explained. “To further enable this aspect of our IDM 2.0 model, we are increasing our engagement with TSMC, Samsung, Global Foundries, and UMC, building on our existing long-term relationships. This will provide us with increased flexibility and scale we need to optimize our roadmaps for cost, performance, schedule, and supply, giving us a unique competitive advantage.”
As pointed out in the webcast, it won’t be Intel’s first shot at foundry. Gelsinger says the market is different today than it was then and described Intel’s first efforts as “somewhat weak.” This time, the CEO says, “we’re going after this much more aggressively.” He calls IFS a key piece of Intel’s IDM 2.0 strategy and he admitted to committing to making it a huge success for Intel.
Intel’s Ocotillo campus in Chandler, Arizona, is the company’s largest U.S. manufacturing site. Four factories are connected by a mile-long automated superhighway to create a mega-factory network. In March 2021, Intel announced it will invest about $20 billion to build two additional factories at the Ocotillo campus. (Credit: Intel Corporation)
In general, the tech space wants to see Intel succeed. The company’s history of innovation is compelling, and in order to enter into a new era of product leadership, Intel needs to step up and put the recent past behind it, aligning itself with its long history of making the right moves not only for itself but for the semiconductor space as a whole.
In his presentation, Gelsinger said the world needs more semiconductors, and he’s hoping Intel will be there to provide the capacity the market needs right now. “We’re bringing back the execution discipline of Intel,” Gelsinger says. “[…] We have confidence that we’re going to meet not just our existing customers’ (needs), we’re going to be leaders in the market, and we’re going to satisfy the new foundry customers, because the world needs more semiconductors, and we’re going to step into that gap in a powerful and meaningful way.”
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