Intel is building new chip factories and will produce for other manufacturers

Intel will invest in the construction of new chip factories in both Europe and the United States. This year, the construction of two new fabs will begin in Arizona. Intel wants to expand its own capacity, but also start producing for other manufacturers.

The two new factories will be located on Intel’s Ocotillo campus in Arizona, where Intel already has four chip factories. The construction of those two fabs will involve an investment of 20 billion dollars. According to Intel, the new factories are intended to make leading-edge chips. Intel wants to produce chips with EUV, among other things. For this, it will have to purchase chip machines from the ASML, which is the only manufacturer that makes the necessary machines.

Construction will start this year and chip production is expected to begin in 2024. According to Intel, the expansion will create 3000 permanent high-tech jobs. Intel will build more new chip factories in Europe, the US and ‘other global locations. Details are not yet known, but Intel CEO Pat Gelsinger says the company will reveal more later this year.

Intel Foundry Services

Intel wants to expand its own capacity, but also plans to make chips for others. That is why the company starts Intel Foundry Services. With this Intel wants to offer its services to chip designers who do not have production facilities themselves.

Intel says it will make x86, Arm and Risc-V processors for customers. Those customers then provide a design, or part, and Intel takes care of the production. Intel will play the same role as manufacturers such as TSMC and Samsung, who make chips for AMD and Nvidia, for example. It is not yet clear to what extent Intel will make its x86 architecture available to others.

Dr. Randhir Thakur will be in charge of the new business unit and will report directly to CEO Pat Gelsinger. The new CEO places the setup of the Foundry Services under the IDM 2.0 vision for the future. This stands for integrated device manufacturing and refers to Intel’s ability to both design and produce chips itself.

Outsource more, including consumer CPUs

At the same time, Intel announces that more production will be outsourced to other chip manufacturers in the coming years. This is necessary because Intel has not yet completed the 7nm process, the 10nm process is slowly getting under way and the production of new chip factories takes years.

Intel says it will tighten existing ties with chip manufacturers. Gelsinger specifically mentions TSMC, GlobalFoundries, Samsung and UMC. Such chip manufacturers already produce chipsets for Intel, for example. Intel wants these parties to make more modular tiles from 2023 for ‘products that form the core of Intel’s offering, both for consumers and for the data center segment’.

In fact, Intel indicates that it will partly outsource the production of consumer and server CPUs. Modular tiles refer to chiplet-like designs. For example, Intel could outsource the production of chips with CPU cores to TSMC, so that they are made in a small process. AMD also does this with its Ryzen processors.

Collaboration with IBM

Intel also announces a new partnership with IBM, aimed at researching the creation of ‘new generations of chips and packaging techniques’. Concrete details have not yet been disclosed, but Intel said teams from the two companies in the United States will work together with the goal of taking chip production in the US to the next level, in order to remain competitive in the global chip market.

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