Intel's Gelsinger grades his chip flip a hit, but AMD exec thinks it's more silicon slip
Exiting fab biz was 'turning point' for House of Zen, claims Darren Grasby
Canalys EMEA Forum Intel CEO Pat Gelsinger might be giving himself a "passing grade" in his turnaround efforts since moving into the top office at the chipmaker, but an exec at arch-rival AMD isn't being nearly so generous.
Gelsinger returned to Intel in March 2021 and has since tried to reignite revenue growth and regain technology leadership. Intel was leapfrogged by AMD in terms of product availability, the move to multi-die packages, which it belatedly copied, and ultimately by market capitalization for the first time in November last year.
One striking decision made by the Intel veteran is to build foundries to produce processors for other companies, a bold strategy when so many other rivals are fabless, including AMD.
Asked at the Canalys EMEA Forum 2023 if Intel can succeed, Darren Grasby, exec VP for strategic partnerships and president of AMD EMEA, replied emphatically: "Of course not."
He hinted that the decision to embrace contract manufacturing could be a turn that Intel might come to regret.
"Intel has gone down these paths," he said, "and if you think about the journey of AMD we had our own fabs many years ago and we chose to go fabless, and it was the turning point of the company that allowed us to invest those R&D dollars into the roadmap, and they're the roadmaps that are bringing that product and leading edge technology to market today."
Chip production facilities currently under construction by Intel include two in Arizona, another two in Ohio, and a packaging plant in New Mexico. In Europe it is building a chipmaking site in Magdeburg, Germany.
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At the end of last week, Intel said it was getting ready to launch high volume manufacturing at its fab in Leixlip, Ireland, via the Intel 4 process, which is its first production node that uses extreme ultraviolet lithography.
After that launch, Gelsinger spoke to Bloomberg about the progress he and the company made. "I would give us a passing grade, two and a half years into the journey," he said.
He added: "My product machine is, you know, I won't say it's first class, but it's no longer broken."
"If Intel is to be successful as a foundry service provider, it will have to be able to accept business from its chip competitors as these are the only companies that need access to high volume leading edge foundry services, apart from the smartphone application processor companies – such as Qualcomm."
Andy Buss, IDC's Europe senior research director for the Future of Digital Infrastructure, told The Reg it was a "tough call to make" in determining if Intel is doing the right thing in building more fabs.
"Jerry Sanders, founder and ex-CEO of AMD, always used to claim that 'real men have fabs,'" he pointed out.
The "reality," he said, is that Gelsinger does realize the shifting sands and is aiming to alter how Intel designs and makes it own products, as well as opening up fabs and design tools to third-party products. Intel has already tried to "de-risk and diversify" by using TSMC, including to produce the Arc GPU silicon and tiles in the upcoming Meteor Lake Core Ultra series, Buss added.
"Intel is also making strides in attracting foundry customers, including Arm and MediaTek, and will be open to manufacturing products for AMD and Nvidia should they wish to."
To succeed in chip manufacturing, scale is required – a point raised by Gelsinger when he spoke at Intel's AI Innovation event weeks ago.
"They have shifted how the internal products team interface with the fab team, acting as external customers effectively and having to use the same tools and design techniques as foundry customers to avoid the tendency to tweak circuits and process for corner cases and making it hard for multi-party design and manufacturing," said Buss.
The IDC analyst also raised the question of "fab capacity and commitment," saying that AMD is competing with Apple, Nvidia and others for TSMC's lead edge fab space. "For most companies it's good therefore that there is a choice of foundries, including TSMC, Intel, Samsung, and others."
One thing is certain. Intel is getting lots of support in its chip building efforts in the form of CHIPS Act funding in the US and EU, which "do somewhat sweeten the bitter pill of investments that can eat up up to $20 billion for a fully populated leading edge fab."
We have asked Intel to comment. ®