Intel's new captain's IDM 2.0 strategy: spending $20 billion to build a factory

In the global semiconductor industry, the old giant Intel is in poor condition today. However, under the leadership of the new CEO Kissinger, Intel is preparing to take a variety of new measures to reverse the current passive situation.

According to reports, Kissinger is igniting the "three fires of a new official". On March 23, at a global live broadcast event with the theme of "Intel's Efforts: Creating the Future with Engineering Technology", Kissinger announced several grand plans, including outsourcing more of its own chip manufacturing business to foundries in the future, investing $20 billion in the construction of two new chip factories in Arizona, and setting up a new department "Intel Foundry Services" to manufacture chips for external semiconductor companies.

For Intel's semiconductor design and manufacturing business, Kissinger has developed a strategy called "IDM2.0", which mainly includes three parts. First, Intel's own semiconductor manufacturing business will still play an important role in its own products. Second, Intel will expand the use of resources from external foundry companies, such as TSMC, Samsung Electronics, GlobalFoundries, etc. Starting in 2023, Intel will entrust foundries to produce some core chips needed by consumers or enterprises.

The third strategy is the aforementioned foundry services division, which is led by Randhir Thakur. This division is an independent business group that will use Intel's chip production technology to develop and manufacture x86, ARM or RISC-V processors for external customers.

It is reported that the chip factories that Intel provides foundry services to are mainly located in the United States and Europe, and its partners in this business include IBM, Qualcomm, Microsoft, Google, etc.

The two chip plant investment plans in Arizona will expand Intel's existing Ocotillo semiconductor manufacturing base. The timing of this investment plan is very critical. The world is currently experiencing a semiconductor supply crisis, with the automotive industry bearing the brunt. This also provides expansion opportunities for the semiconductor manufacturing industry.

Kissinger also revealed that Intel is also preparing to build more chip manufacturing plants, and later this year the company will announce the addition of new chip plants in the United States, Europe or other places. These plants also provide a production capacity base for Intel's own product manufacturing and external foundry.

At the conference, Intel also announced a research and development cooperation plan with IBM, focusing on the next generation of logic chips and semiconductor packaging technology. However, the details of the plan were not disclosed.

Finally, Intel also announced that it will replace the traditional Intel Developer Forum conference with a new Intel Innovation conference, which will be held in San Francisco, California in October this year.

Intel is currently facing many crises. As the leader in PC chips, Intel missed the era of mobile processors and is now facing more serious threats from AMD and Apple's self-developed computer processor M1. In terms of semiconductor manufacturing technology, Intel once led the industry, but now it is clearly lagging behind TSMC and Samsung Electronics. The delay of new manufacturing processes has also affected Intel's launch of a new generation of computer and server processors on the market.

After missing out on mobile chips, Intel has invested in various emerging technologies including drones and the Internet of Things, but has not yet found a substantial business breakthrough.

The series of plans announced on March 23 were the first steps for Kissinger, the "new captain," to correct the direction of Intel's "corporate giant ship."