Locator: 49377INTEL.
Intel:
On the desert floor of the Phoenix Valley, Intel has poured more than $20 billion into a four-story manufacturing plant that is the centerpiece of the ailing chipmaker’s comeback bid.
Inside the building, known as Fab 52, the company is rolling out a new manufacturing process to make more powerful and efficient computer chips. The process uses the tools from ASML, the Dutch manufacturer of lithography machines, to make Intel’s cutting-edge semiconductors in the United States for the first time in nearly a decade.
During a factory visit last month, two of those $250 million machines sat largely idle while ASML engineers in sterilized white bunny suits worked on one. Two trailer-size footprints for additional machines sat empty nearby, a nod to Intel’s hopes it can eventually expand.
Intel has recently brought a string of potential customers through the plant in Chandler, Ariz., and pitched them on manufacturing their chips at Fab 52. But analysts say most chip companies want to see whether Intel can succeed in making its own computer chips before asking it to produce their chips for smartphones, artificial intelligence systems and other technologies.
The focus on the new facility underscores how critical this moment is to Intel’s future. Once an exemplar of Silicon Valley success, the company has fallen behind competitors as a chip manufacturer and designer. Intel was leapfrogged by Taiwan Semiconductor Manufacturing Company, or TSMC, after it failed to implement ASML technology. And it was dropped from Apple’s laptops after its chips struggled with battery life and performance.
As sales declined, Intel churned through leaders. In March, it named Lip-Bu Tan its third chief executive in five years. From his predecessor, he inherited a troubled balance sheet and an audacious strategy to introduce five new production processes in four years while remaking Intel as a manufacturer for other chip designers.
Mr. Tan shored up the company’s finances in August when the Trump administration pumped $8.9 billion into the company for 10 percent of its business. The deal made Intel the recipient of one of the largest U.S. government investments in a company since the 2008 financial crisis.
The Trump administration made the investment by releasing money promised to Intel under the CHIPS and Science Act, a federal program signed into law in 2022 to provide companies with grants to revive U.S. semiconductor manufacturing.
In 2021, as Washington lawmakers were weighing the CHIPS Act, Intel committed to investing $32 billion in two new factories, Fab 52 and Fab 62, on its Ocotillo campus in Arizona. It later received federal funding to support the project.
Now, Mr. Tan is focused on executing on the second part of Intel’s strategy: its technical turnaround.
At an event last month for a few hundred technology analysts and members of the news media, Sachin Katti, Intel’s chief technology officer, acknowledged the stakes. He said the new manufacturing process, which Intel calls 18a, and the new computer chip, which it calls Panther Lake, are “foundational to our future.”
“We are of course making two really big bets here,” he said. He added that the manufacturing efforts were “mission critical, not just for Intel but for our country.”
Intel became the world’s dominant chipmaker by staggering the way it adopted new technology, said Ben Bajarin, the principal analyst at Creative Strategies, a tech research firm. The company typically developed a new manufacturing process to etch silicon with billions of small transistors that are slimmer than a human hair. It then perfected that process on an older generation of chips before using it to produce chips designed with new features.
But this time, Intel is trying to make manufacturing and design leaps simultaneously. The 18a process uses the ASML tools to produce chips that stack transistors, so they take up less space. It also routes power through the backside of a chip rather than the top, where data and power collided in the past. The result is a denser, more energy-efficient chip, the company said, capable of piling 10,000 sheets of silicon on top of one another in a stack thinner than a sheet of paper. Intel said its Panther Lake series of chips would allow laptops to run A.I. systems and do all-day computing. It will start shipping the chips early next year.
The company has enough faith in the process that it is moving production of its newest chips to its own factories rather than relying on TSMC, which it turned to after its previous processes faltered. But the changes create more opportunities for something to go wrong, Mr. Bajarin said, which is especially risky in a process where a particle of dust can destroy a chip and lead to financial losses.
Intel’s success is far from guaranteed. Late last year, it informed some customers that its 18a process was lagging behind rivals. At the time, TSMC was producing 30 percent of its leading-edge chips, known as 2 nanometer chips, without any flaws, while Intel’s process was producing fewer than 10 percent of its 18a chips without flaws.
At the two-day event last month, Intel executives declined to comment on the percentage of chips it was making without any flaws at Fab 52. The number of chips that don’t work won’t become clear until the company makes financial reports next year, analysts say.
By bringing some production back in-house from TSMC, the company could save money and improve its profits, said Patrick Moorhead, founder of Moor Insights & Strategy, a tech research firm. It’s also a proving ground to show big producers of chips like Nvidia or Apple, which exclusively rely on TSMC, that Intel could produce their semiconductors.
Much more at the link.
During the heyday of Wintel, "win" and "tel" had relative monopolies. Only competitor, if one could call it that, was a garage start-up called Apple. Moore's Law relatively new.
ow, so many competitors:
- Apple Silicon
- Android or non-Apple or all the rest
- Nvidia
- AMD
- Micron
- Broadcom
- Amazon
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Ticker and market cap, today:
- market cap less than $175 billion
- competing against at least three chipmakers with multi-trillion market caps with in multiple markets
