Intel Looks to Regain Semiconductor Chip Leadership from TSMC; Separates Manufacturing and Fabless Units

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Could fabless be fabulous for Intel?

www.hpcwire.com/, Jul. 27, 2023 – 

The company has set a target date of early 2024 to grant independence to its foundry business, which will get its own accounting books. In the past, Intel dedicated its factories exclusively to its own chips, while a few forays into manufacturing chips for outside customers failed.

"This was the right strategy for the time and we were highly successful. The semiconductor industry and computing ... has evolved rapidly and we need to adjust our business operations in response," said David Zinsner, Intel Chief Financial Officer, during a call this week.

The goal of separating fabless and manufacturing operations is to serve markets that include the cloud, edge, and AI, which are emerging. While the company's fabs were previously focused on serving the PC and server markets, emerging market dynamics guided the company's strategy to quickly diversify into making chips for the new markets.

Intel officials detailed how the new fabs, which will be set free to make chips for non-Intel customers, will help make its chip manufacturing and design more efficient. Intel's chip design business units will become customers of the fabs, just like any other customer seeking fab capacity.

The competition for capacity will help Intel's fabless units become nimble and efficient. It will not be like the past when Intel's factories were dedicated to making its own chips and manufacturing capacity was guaranteed. Going forward, Intel's chip design units could lose out internal fab capacity to third parties, who may be willing to pay top dollar for guaranteed capacity.

"It will encourage business units to move to the next node faster as they won't be burdened by the initial high cost as a new process ramps," Zinsner said.

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