$20b for Two Fabs, Meteor Lake 7nm Tiles, New Foundry Services, IBM

The new CEO of Intel, Pat Gelsinger, has today outlined his vision for Intel over the coming years. During an online presentation entitled ‘Intel Unleashed: Engineering The Future’, Pat Gelsinger outlined five key topics upon which Intel will work towards and what it means for the company at large. At the center of this is a reaffirmed commitment for Intel to retain its own fabs, but also double down on its ability to drive the latest technologies at scale by building new manufacturing facilities inside the US.

Highlights of Intel’s Announcements Today

• Two new fabs in Arizona, $20b investment
• New Intel Foundry Services, offering Intel manufacturing to customers
• Next generation 7nm chiplets for ‘Meteor Lake’ will finish design in Q2 2021
• New research collaboration with IBM in foundational semiconductor design
• New Intel Innovation event in Oct 2021, Spirit of IDF

We’re Keeping the Fabs: Please Stop Asking

Since the start of the year, previous Intel CEO Bob Swan and new Intel CEO Pat Gelsinger have both done the equivalent of shouting from the rooftops when it comes to Intel’s market advantages. At the top of that list is Intel’s vertical integration between manufacturing and chip design, enabling Intel to control the process from top to bottom more closely than any of its chip competitors. This unique proposition labels Intel as an IDM (integrated device manufacturer) or having an IDM model (integrated device manufacturing model), and the only company that can even come close to Intel in this regard is Samsung. Intel’s plus over its competitor here is that it can apply its own designs to a scale that Intel is often attributed to.

In recent months there have been comments from analysts and investors about the potential for Intel to spin out its manufacturing plants and facilities into a separate business, similar to how AMD detached its manufacturing facilities into a new company called GlobalFoundries. The benefits of this move would allow Intel to segregate the losses between the two sides of the business, and showcase the core Intel product teams in a better light by comparison to the manufacturing arm. This sort of path has significant pitfalls, most importantly that Intel’s manufacturing main customer is Intel. GlobalFoundries had this problem initially, but Intel’s foundry arm is on a much larger scale.

So to that end, Pat Gelsinger today is hoping to put those rumors to rest, more than he stated on Intel’s 2020 financial call. Not only is Intel going to retain its manufacturing facilities, but it is going to embrace a new era of manufacturing, which is going to be called IDM 2.0.

IDM 2.0: Build, Expand, and Productize

This direction from Intel is built upon, first and foremost, the enthusiasm of Pat Gelsinger rejoining the company. Since even before he took over the role of CEO, former Intel engineering experts were coming out of retirement to work on exciting new products with Pat…