Intel’s chief executive is setting up a new division to make chips for its rivals.Until now, the US firm’s factories were focused on making chips of its own design for computers, servers and other equipment.
Pat Gelsinger said he hoped Apple would be one of the new division’s clients.
Apple is in the process of switching away from use of Intel’s own x86 chips to its own silicon, which is currently manufactured by Taiwan’s TSMC.
Starting with the new Intel Foundry Services business. It sounds like Intel is going all out to make chips for other companies who lack the facilities to do so themselves. The reason why they are helping the competition is because Manufacturing is a capacity game. And if you’re not leading in terms of total capacity, you will fall behind. So to some degree it’s a necessity. If we’re going to be in the manufacturing business, they have to be a foundry for themselves and for others.
Simply put, the world needs more semiconductors.
We’re in an environment where digitisation was at a strong pace of growth. And then Covid kicked us into a dramatically different gear.
The world needs more semiconductors, and Intel are one of the few companies that have leading-edge technologies to be able to step into that void. And to keep it for their own products simply is not the right thing for the planet, for the industry, and for a globally distributed supply chain.
This may be disruptive coming in to take business away from Samsung and TSMC. because Overall everybody is groaning to catch up to the overwhelming demand. And they are going to use Samsung and TSMC for some of their products.
So this is about “co-op-petition”. They expect to have strong partnerships with them as customers, and in some cases they’ll compete a little bit. But overall, this is a rapidly growing $100bn market segment that simply needs more supply.
It also needs more geographically balanced supply.
Today there’s a heavy bias to Asia. And as seen, coming out of some of the disruptions and challenges, the world needs US and European supply in a more balanced way. It’s the right thing for the global supply chain requirements, for both commercial as well as for government and defence use as well.
Intel also has a large chip plant in Dalian, China and At this point, have no expansion plans for what they have there.
The announcement yesterday was for two new fabs in Arizona. They already have construction projects going on in Oregon, Ireland and in Israel.
And they announced that they expect to open their next sites, in both Europe and the US, within the next year. So at this point, four major sites under construction, and hopes to add two more within the next year.
Intel’s intentions to build more in Europe, raises speculation whether its in the UK without any confirmation however.
These are extraordinary capital investments with extraordinary job generators and hopes Apple might be one of Intel’s clients, despite its decision to stop using Intel’s own chips may not be realistic. though everybody wants multiple suppliers so there’s very real potential but they have to earn that business and they have to be able to go to competitors and be able to say: “I want you to become my customer.”
That also includes Nvidia, Qualcomm and Broadcom, in addition to Microsoft and IBM they want all of them to say they need more technology… and they trust that Intel is going to become one of their key suppliers.”
And that includes Apple as one of the biggest users of advanced semiconductor capabilities.