Intel CEO Pat Gelsinger reiterated that the company has no plans to divest its foundry despite investor pressure. In a recent interview, Pat Gelsinger stated:
We believe that in the current environment, the in-house foundry model is the right path for us. ”
This decision comes after Intel struggled with its 10nm process technology a few years ago. This has led some investors to suggest that the company would be better off spinning off its chip production into a separate entity and instead focusing on chip design, similar to Qualcomm.
However, Intel has chosen to continue manufacturing chips in-house and has even created Intel Foundry Services (IFS) to utilize these facilities to complete contract work.
In 2021, Intel Corporation "lost its way", that is, there has been a dispute at the decision-making level of the company over whether to keep the fab. As Intel's new CEO, Pat Gelsinger made it clear that Intel will continue to be an integrated design-maker (i.e., keep its fab) and may outsource specific product lines to an external fab (TSMC).
The plan may continue to irritate some of Intel's shareholders, but Pat Gelsinger believes it is one of the best decisions in recent years. Still, if Intel wants to remain competitive and avoid manufacturing issues, it should seriously consider its long-term strategy of divesting its fabs.
Pat Gelsinger intends to take a more strategic step rather than ** all the factories one by one. Intel has invested heavily in existing fabs and is currently building new fabs, so why not further expand its production capacity by acquiring Globalfoundries from Abu Dhabi-controlled Advanced Technology Investment Company (ATIC)?
Glofo is already the world's third-largest foundry, and while it currently lacks sub-10nm manufacturing nodes to compete with Samsung or TSMC, its factories in Germany, Singapore and the US allow it to offer considerable capacity. Intel may also gain an experienced management team and employees Xi working with external customers.
Intel should delegate the integration to the Glofo team, perhaps with greater capacity with the products that Glofo is currently creating, including a new fab in Matla, New York.
However, Pat Gelsinger said in a recent interview that Intel will not divest its foundry business, but will release a separate financial report starting in the second quarter of next year.
However, in early December, there were rumors that Intel would throw an order of $4 billion to TSMC in 2024 for the production of foundry 3nm CPU chips. The order runs until 2025, with total orders of up to $10 billion. This shows that in order to meet the demand for orders, Intel still has outsourced foundries when its own chip production capacity is insufficient.
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Clearly, Intel wants to balance its chip development division and foundry business through internal restructuring to better protect the assets and rights of third-party customers. Pat Gelsinger said that most of the orders for the foundry business currently come from Intel itself, and it is more profitable to keep the structure of the two areas unified.
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