Intel’s new chip making strategy: 5 things to know
For over five decades, Intel has been a leading company in the semiconductor trade. Currently, the firm is pushing for a new technique under a new CEO as it seeks to send off its Asian and home rivals.
What’s Intel’s new strategy?
The majority of Intel’s manufacturing ability over the years has been sustained to make personal merchandise, alongside its flagship central processing models. These models are used in servers, notebooks, and cutting-edge computing gadgets. The U.S. firm now seeks to boost its manufacturing capability to produce chips for different industries, thus delving into the chip foundry enterprise.
Its goal is to get collaborations and orders from companies like Qualcomm and Apple and cloud service supplies like Microsoft and Google, and suppliers of networking accessories such as Ericsson and Cisco. These companies are existing clients of a rival company, the TSMC, Taiwan Semiconductor Manufacturing Co., which also functions as Intel’s provider.
How does Intel plan to enforce this strategy?
Intel plans to implement this strategy by spending $20 billion by 2024 to assist them in constructing two-chip services in Arizona. The company plans to begin developing now so they can start the manufacturing process by 2024. This target is identical to that set by TSMC for their proposed $12 billion plants it wants to construct there. Intel can set up a new enterprise unit called Intel Foundry companies. Here are five things you should know about the chip-making strategy.
Intel’s $20B U.S. Manufacturing Expansion Will Create More Capacity
Intel plans to extend its use of outsourced foundries for the future, and the company is committing to $20 billion roughly to create new Arizona manufacturing fabs. Intel will use these products to make chips other companies designed as part of Intel’s foundry business. This increased fan capacity will help develop unquestioned leadership for the manufacturing process.
Intel Plans On Expansion of Chip Production Using Foundries
Intel intends to continue building most of its chips using its gabs and will deliver the best products in all categories. External foundries are not a new idea because the company has been using foundries in making connectivity, chipsets, and communications.
However, with the IDM 2.0 strategy, Intel will switch to external foundries for significant products in the company, including PCs and CPUs for servers. The foundries will support the modular approach to building chips that use tiles and are made based on supply, cost, and performance. The ability to construct the best products expertly is what differentiates Intel and delivers excellent value to customers.
In 3-4 years, Intel Will Return To ‘Unquestioned Leadership’ For CPUs
By 2024 to 2025, Intel is expected to return to Unquestioned leadership for its products. Previously, the company used the tick-tock model to introduce new advances for products while changing manufacturing processes. This approach birthed the shrink of processor transistors every two years who brought better efficiency benefits. Intel hopes to reestablish this model with IDM 2.0.
Intel Foundry Services, A New Biz For Creating Other Companies’ Chips
Intel is launching a standalone business called Intel Foundry services, in addition to ramping the use of external foundries, which aims to provide foundry services for companies who produce their chips. The company will cooperate with competitors to increase the use of foundries.
Collaborations Between Intel And IBM: Production of Next-Generation Chip Technologies
In support of the IDM 2.0 strategy, Intel will start research collaboration with IBM in creating following generation packaging technologies and logic for processors. This collaboration will improve packaging velocity and future innovations.
What does this mean for Intel’s rivals?
Asia is aiming at rounding 80% of semiconductor manufacturing worldwide. If they can woo U.S shoppers to America, it makes Intel get to head-on competition with rivals like South Korea’s Samsung and TSMC. These firms have become tangled in a tough match for dominance with other big names in the semiconductor industry. The nanometer dimension is the measure for relative power for the chip manufacturing industry, and the smaller the quantity, the more superior the chip. TSMC controls more than half the foundry market worldwide and predicts their 3-nanometer capability will start mass production by the second part of 2022.
On the other hand, Intel has halted its superior 7-nanometer manufacturing know-how till late 2022 and not less than that. It looks to outsource some of its chip manufacturing to other companies as an alternative plan. If Intel’s initiative turns profitable, it will take a toll on Samsung and TSMC from 2023.
Nomura securities believe that Intel’s transfer to the foundry is a shock and may be seen as sensible from a geopolitical perspective. Washington assists in home chip making. In addition, Nomura identified possible conflicts of interest with client forms, which are software program, system, and analysis firms that Intel hopes to serve.