Intel (Intel) will fully invest in the chip OEM business. At the beginning, it will invest 20billion US dollars in two chip plants in Arizona; Pat Gelsinger, the new CEO, said that the company is establishing contract manufacturing as an independent business, called Intel foundry services (IFS).
Ifs will be led by Randhir thakur, who once worked as a senior manager of applied materials, a large semiconductor equipment manufacturer, and joined Intel in 2017 to be responsible for global supply chain management, and will report directly to Gelsinger; Gelsinger said, “we are ready to start negotiations with customers at any time.”
Intel plans to further invest in chip OEM services, which is just the opposite of what some commentators of the company want to hear for many reasons. Once considered as the most technologically advanced semiconductor manufacturer in the world, its manufacturing business has been bumpy in recent years. It has not only been surpassed by competitors such as TSMC and Samsung, but also become more and more difficult to catch up with.
To this end, Intel is committed to using other chip foundries (these plans have not changed at all). It is too expensive and risky to set up and operate a chip factory. Although Intel also has some limited chip OEM business, the chip OEM service is both a business model and a technical solution. The company has not made outstanding performance in these two projects. At the macro level, the manufacturing industry has moved to economically backward countries for some reasons.
Some people want Intel to tie all this together and see it as an opportunity to get rid of the entire manufacturing business. However, when Intel’s board of directors hired Gelsinger, it was a sign that the company regarded reviving the manufacturing business as an equally important option as getting rid of it. Intel may greatly expand its manufacturing business and devote itself to the operation of chip foundry services with global competitiveness, which is an option only available under exceptional circumstances.
First, the Sino US trade war initiated by former US President Trump had a serious impact on the global supply chain, and then there was the novel coronavirus pneumonia epidemic, which caused unprecedented chaos in Global trade. The global warming problem has finally become so serious that a rare cold snap occurred in Texas not long ago, which caused semiconductor manufacturers such as Renesas and Infineon to “freeze” their local chip factories for several weeks; In Taiwan, it is a rare drought that makes the chip foundry companies TSMC and UMC face a water shortage crisis.
To make matters worse, a Risa chip factory in Japan was shut down due to fire… Various natural and man-made disasters have increased the pressure on the global semiconductor supply chain, and also shaken the economic view that the free market insisted on “winning at the lowest cost”. Now more and more people agree that the integrity of the supply chain, the integrity of the national economy and national security must be considered together with the cost.
The national security units of governments around the world have always realized that it is problematic to rely on potential competitors to provide key materials and commodities; After the supply chain disruption caused by the trade war and epidemic, almost everyone concluded that the manufacturing capacity must be more extensive and cautious
Scattered arrangement. The recent shortage of semiconductor components in the global market has made many industries, including vehicles, smart phones and game consoles, eager to obtain chip capacity.
Establishing more advanced manufacturing capacity is one of the solutions, or establishing new reliable and safe production capacity in a certain place in a western country with sufficient funds to undertake more manufacturing capacity. In short, the western world wants more chip manufacturing capacity, so Intel under Gelsinger seized this opportunity; The company may not be the best supplier of this solution, but it has the advantages rarely seen by other manufacturers. Despite recent setbacks, Intel is still one of the most advanced semiconductor manufacturers in the world, and has the ability to build its own chip factory.
Gelsinger said that the chip OEM service is expected to reach a market size of US $100billion by 2025; Intel’s new IFS plant will mainly meet the needs of the U.S. and European markets, especially for defense related applications. In addition, he also stressed that Intel already has some OEM business and can start business negotiations at any time; Intel can supply the IP of chip OEM customers, including x86 processor core, graphics processor, multimedia, display, interconnection interface and fiber, as well as arm and risc-v processor IP.
The two new chip factories built by Intel for the chip OEM business will be located in ocatillo Park in Chandler, Arizona, USA. Gelsinger also mentioned the capacity in Europe for many times, but did not provide relevant details; This means that Intel may establish a base in Europe. At present, the company has production sites in Ireland and Israel.
Gelsinger pointed out that the promised investment amount of $20billion is owned by Intel, and its strategy is not to rely on any subsidies from the state government or the United States federal government. In response, he added: “of course, we want incentives, but we announced the new plan without obtaining incentives. We first launched actions to make our chips public, and we are confident that we will get a positive response from the world.”
Who will be potential customers of IFS?
Intel also listed the “All Star” potential customers that support the company to expand its chip OEM business, including Amazon, Cisco, Ericsson, Google, IBM, IMEC, Microsoft and Qualcomm. In addition, Gelsinger confidently said that Intel was also ready to try to win business from apple.
Satya NADELLA, CEO of Microsoft, personally appeared at Intel’s press conference and expressed high enthusiasm for the achievements that the two companies have achieved and are expected to achieve in the future; Although the upcoming cooperation between the two sides was not described in detail, NADELLA’s presence was still very important. Intel designed chips for Microsoft’s surface laptop, but manufacturing problems have made many partners impatient, including Microsoft. NADELLA’s platform is a positive signal that the two companies will continue to cooperate.
To ask who is likely to become a customer of Intel ifs, basically, we should also ask those chip companies that are willing to let a real competitor produce the most advanced chips. For this reason, Intel is obviously trying to eliminate such doubts, and set the IFS business as a vertical business unit that operates independently and is responsible for its own profits and losses, reporting directly to Gelsinger.
Gelsinger shows Intel’s first exascale class graphics processor, which combines 40 small chips in a single emib package (tile in Intel’s terminology); He pointed out that the chip would be imported into the aurora supercomputer of Argonne National Labs in the United States.
Another question is, how can a company that is especially famous for its manufacturing problems start to build chips for the world’s most demanding customers? Solving manufacturing problems is the first major event mentioned after Gelsinger announced Intel’s new guiding principles – market leadership, execution, innovation and attracting the best talents.
He said that Intel’s mistake was that it was too cautious about extreme ultraviolet lithography (EUV) devices when it began to design 10 nanometer node circuits; To remedy, the company’s design became very complex, leading to manufacturing problems. However, the insufficient trust in EUV continues to 7 nano nodes, so the manufacturing problems persist. Gelsinger stressed that now Intel has confidence in using EUV and should have got rid of the manufacturing problem.
So What about 5 nanonodes? (not to mention 3nm)
Editor in charge: PJ