With its Ohio fab under way, Intel's next challenge: Keeping its promises
The chipmaker not only needs to find nearly 10,000 workers, it has to deliver a competitive product
Interview As Intel breaks ground on its Columbus, Ohio mega fab, the company’s Foundry Services (IFS) President Randhir Thakur’s biggest concerns have less to do with finding workers to build and run the fabs and more to do with keeping the chipmaker’s technology roadmap on track and the cost of manufacturing chips in check.
Speaking with The Register this week, Thakur said the cost of operating a fab in the US is 35-40 percent higher than in Taiwan. “We need help just leveling the playing field,” he said, echoing a common refrain from the chipmaker since Pat Gelsinger launched IFS in early 2021.
In this regard, things are looking up for Intel following the passage of the $280 billion CHIPs and Science Act. The bill allocates roughly $39 billion in subsidies to support both leading and legacy process nodes. The chipmaker also stands to benefit from a 25 percent investment tax credit, valued at roughly $24 billion, on new facilities that begin construction in early 2023.
Intel will also receive substantial tax incentives to the tune of $2 billion from the state of Ohio. That’s in addition to a tax break on equipment costing more than $100 million, reported in June.
However, both those tax breaks and federal subsidies under the CHIPs bill are subject to Intel creating new jobs, both in terms of building the facilities and operating them.
Intel expects to create roughly 7,000 construction jobs just to bring the facilities online. And while Associated Press recently reported that labor leaders in the state say there isn’t a pool of 7,000 workers available, Thakur isn’t worried.
“The reason we chose the location here, a big factor, was actually the availability of labor and talent because of the vicinity of Ohio” to universities inside and outside the state, he said, adding that Intel will need 7,000 workers, but not all at once.
“We are not facing any challenges on the construction side of what is needed,” he added, expressing full confidence in the site manager overseeing the fab expansion. “We believe there is enough availability for us not to see any hiccups.”
An associates degree is good enough
Holding up the construction end of the jobs bargain is a sure thing but he says training technicians to run the fabs presents a very different set of challenges.
“In addition to 7,000 construction workers, we need the Intel talent as well,” he said. “That we’re going to do through investments in the universities locally.”
Intel will need to invest heavily to ensure a steady supply of technicians to run the fabs when they come online beginning in 2025. This means the business has roughly three years, barring any delay, to attract and train as many as 3,000 full-time technical employees.
But while many positions within the facility will require advanced degrees and training, the vast majority will not, he said. “Three-quarters of the population here will be technicians.”
These are jobs that will require at most an associates degree with advancement opportunities for those that pursue a bachelors or higher.
To get the ball rolling, the chipmaker Friday said it would fund collaborative proposals from the University of Cincinnati, Central State University, Columbus State Community College, Kent State University, Lorain County Community College, Ohio University, and two from The Ohio State University.
Intel says the eight leading institutions will receive $17.7 million in funding over three years as part of a $50 million commitment to Ohio higher education. It's hoped that these new graduates will be graduating to fill its fab sites.
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Intel’s technology challenge
The other factor weighing on Thakur’s mind is ensuring Intel is “meeting and exceeding our customer commitments as it relates to our roadmap.”
Following that technology roadmap is something Intel has struggled with in recent years. As TSMC and Samsung have pushed ahead with process tech, Intel has faced setbacks bringing first its 10nm process, and more recently, its 7nm process to market. Intel has yet to ship its 7nm process, which it now confusingly calls Intel 4, whereas its larger rivals began ramping 3nm nodes this year.
With that said, much of the semiconductor demand today is from companies that rely on older process tech. Thanks to the acquisition of foundry operator Tower Semiconductor earlier this year, Intel is now positioned to offer both leading edge and legacy components.
“With the acquisition of Tower, we are able to offer 0.5 micron, which is very, very, very old, all the way to 45nm,” Thakur said, adding that, internally, the chipmaker also offers a 22nm node it calls Intel 16.
This is the same node MediaTek, one of Intel’s early fab customers, plans to use in many of its upcoming products.
However, by the time the first Ohio fabs come online, Intel expects to be ramping its 20a and 18a nodes. The latter is “basically a 2nm-type node with a gate-all-around architecture, and that we’ll be offering after the 2024” time frame, Thakur said.
And while he acknowledges that delays are a possibility, so far, everything is on track.
Hedging bets and hedge funds
Intel hasn’t put all of its eggs in one basket.
Thakur describes IFS as a system foundry. “A system foundry goes beyond the traditional wafer, in fact, it can do the packaging, the chiplet standard, the software,” he said.
This means that even if customers need or want to manufacture their chips elsewhere, Intel can still offer packaging and chiplet integration services.
“We will be able to use different foundries, old and new, design rules and capabilities, and then interconnect them using EMIB or those kinds of packaging technologies,” Thakur said.
Intel is already using this approach for its upcoming Ponte Vecchio GPUs and Meteor Lake CPUs, which package together TSMC-manufactured GPU dies using its EMIB and Foveros packaging tech.
Beyond manufacturing flexibility, Intel has also hedged its bets by bringing private equity into the fold. Late last month, the chipmaker solicited $15 billion in assistance from Brookfield Asset Management to help pay for its now $30 billion fab project in Arizona.
As part of the announcement, Intel adopted what it described as a “Smart Capital” strategy. The strategy essentially boils down to building empty buildings that can be filled with equipment later to suit customer demand.
The idea here is to avoid filling the fabs with billions of dollars in equipment that sits unused, while demand for other process tech goes untapped.
All taken together, it’s clear the biggest challenges facing Intel’s fledgling foundry business is executing on the promises its already made. If it can’t, rival foundries are without question waiting and ready to step in.