On March 24, US local time on Tuesday, the new CEO of chip giant Intel, Pat Gelsinger, announced that the company will spend $20 billion to build two new chip factories in Arizona, the United States. This move will Significantly improve its advanced chip manufacturing capabilities to regain its leading position in the manufacturing industry.

Intel has dominated this $400 billion industry for decades by manufacturing the best designs in its own cutting-edge factories. In recent years, because the company missed the deadline for the development of new production processes, this strategy has collapsed, and most other chip manufacturers have hired foundries to help design. Kirsinger's move is designed to help restore Intel's reputation. At the same time, Intel will also work to re-tilt technological power to the United States and Europe to get rid of excessive dependence on Asian chip manufacturing.

Kilsinger revealed that Intel is creating a new division called Intel Foundry Services. Its goal is to "become a foundry manufacturer with the United States and Europe as the core to meet the needs of global semiconductor manufacturing." To support this effort, Intel will begin to substantially increase its manufacturing capabilities, including spending $20 billion to build two new factories in the existing campus in Chandler, Arizona, which will create 3,000 permanent jobs.

In addition, Intel will announce further expansion of production capacity in the United States, Europe and other regions later this year. Kilsinger promised that the company will choose to build a new plant in Europe and the United States next year. Currently, the company has factories in Ireland, Israel and China.

Intel will use these factories to manufacture its own chips, but it will also be open to external customers, which is known as the "foundry" business model in the chip industry. Kilsinger said that the new plant will focus on cutting-edge computing chip manufacturing, rather than the older or specialized chip production that manufacturers such as GlobalFoundries specialize in. Intel has found customers for the new factory, but cannot reveal their identities.

Kirsinger previously stated that companies such as Amazon, Cisco, Qualcomm, and Microsoft all support its efforts to provide chip manufacturing services. However, this new strategy will directly challenge the other two companies in the world that can manufacture the most advanced chips, namely TSMC and Samsung Electronics. The two companies have dominated the semiconductor manufacturing industry for many years and shifted their focus from the United States to Asia. Now more than two-thirds of advanced chips are manufactured in Asia.

TSMC previously announced a plan to build a new plant in Arizona. The project cost 12 billion U.S. dollars and is expected to receive US government subsidies. At the same time, Samsung is also seeking government incentives and plans to spend $17 billion to expand its chip factory in Austin, Texas.

Kilsinger said that Intel will be committed to strengthening the foundry business to change this global balance, although Intel has always been a secondary player in this field in history. He said that Intel will provide chip customers with the ability to authorize the use of its own core technology (that is, the x86 instruction set architecture), as well as the ability to manufacture chips based on the technology of the chip design company Arm or the emerging open source technology RISC-V. Intel also announced a new research cooperation plan with IBM in computing chips and packaging technology.

But while Intel is competing with TSMC and Samsung, the company also plans to become a larger customer of the two companies, and instead let the two companies produce sub-components of their chips to manufacture certain components in a more cost-effective manner. These chips. Kirsinger said: "Whoever has the best process technology, we will choose whoever. We will use internal and external supply chains, and ensure the best cost structure. We believe that supply, product and cost combination is the killer. ."

Intel is one of the few remaining semiconductor companies that can design and manufacture their own chips at the same time. Competitor chip design companies such as Qualcomm and Apple rely on foundry manufacturers. Investors such as Third Point have previously urged Intel to consider divesting its costly chip manufacturing business in favor of external foundry, which is the method most chip companies take to increase profits.

Kilsinger's plan may also be questioned. In addition to recent manufacturing technology issues, Intel has also tried to operate as a foundry for other chip companies in the past, but with little success.

After Intel disclosed its new strategy for 2021 and its full-year financial guidance, the stock soared by 6.3%. Intel expects its revenue this year to be US$72 billion, with adjusted earnings per share of US$4.55. Analysts expect it to be US$72.9 billion and US$4.77, respectively. The company said it expects to spend between $19 billion and $20 billion on capital expenditures. Kilsinger said that the 2021 forecast "reflects the current situation of the industry's shortage of components such as substrates." (Little)

Source: NetEase Technology Report, translated by Google Translate