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5 Things To Know About Intel’s Game-Changing IDM 2.0 Strategy

Intel is making a $20 billion manufacturing expansion in the U.S. while also increasing use of external foundries as part of a ‘major evolution’ in its manufacturing model, which CEO Pat Gelsinger says will result in greater chip capacity and a return to ‘unquestioned leadership.’

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Intel Foundry Services, A New Biz For Creating Other Companies’ Chips

In addition to ramping up its use of external foundries, Intel is also launching a new standalone business to provide foundry services to companies making their own chips.

The new business is called Intel Foundry Services, and Gelsinger said it will “become a major provider” of chip manufacturing capabilities for companies in the United States and Europe. He cited cloud service providers and Apple as examples of companies Intel would like to gain as foundry customers. Apple, Amazon Web Services, Microsoft and Google Cloud are all now designing their own chips, which have created new threats for Intel’s traditional processor businesses.

“Imagine if you were a major cloud service provider saying, ‘boy, I have tens of millions of cores that are running, and now I can optimize them for my business and add some of my stuff and maybe take out some things that I don‘t utilize?’ This is a powerful strategy, and we believe that now is the time for Intel Foundry Services,” Gelsinger said.

Gelsinger said Intel Foundry Services could lead to the company collaborating with competitors like Qualcomm, which is among the companies that have expressed early support for the new business. Other companies that are supporting the establishment of Intel Foundry Services include Amazon, Cisco, Ericsson, Google, IBM, Microsoft and SiFive.

Between Intel’s increasing use of foundries and the creation of its own foundry business, the company will increasingly cooperate with its competitors and vise-versa.

“This is clearly a co-opetition story,” Gelsinger said, “and one that, by managing our business judiciously, by creating more business opportunities, leveraging our world-class IP portfolio, we see IDM 2.0 as a unique strategy for Intel, and one that the world needs right now.”

Intel will offer foundry customers its IP for x86 cores, graphics, AI and interconnect, and the business will also support customers who have designs based on Arm and RISC-V architectures, according to Gelsinger. He added that foundry customers will also have access to Intel’s chip packaging technologies like Foveros and Embedded Multi-die Interconnect Bridge as well “leading” process technologies.

Intel Foundry Services will be led by Randhir Thakur, a company executive who joined intel in 2017 after previously serving in multiple leadership roles at Applied Materials, a Santa Clara, Calif.-based provider of engineering solutions for chip manufacturing.

Gelsinger said Intel believes the total addressable market for foundry services will be $100 billion by 2025, “with most of the growth coming from leading-edge computing, which is our expertise.” The establishment of more foundry capacity in the U.S. will help balance out the heavy concentration of foundries in Asia, he added.

 
 
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