How far and fast Intel moves to enter the foundry business remains unknown, especially since is secretive about its long-term strategy. But that's not to say that the company is undecided about the potential opportunity in the foundry business.
I would say au contraire. We should never bet against Intel.
Lately, we've been asking industry sources what they know about Intel's foundry business, and what worries them if it takes the leap. For now, our unscientific survey shows that many remain largely skeptical about Intel being their potential foundry.
One of the most common arguments against Intel as foundry boils down to this: "How could Intel, whose process technology is optimized for its single product (its microprocessor architecture), help meet more complex [design and production] requirements of my chips?"
Many we spoke with implied that they either know or have heard about several big players--in addition to niche startups like Achronix--already using Intel as their foundry. Asked who are those big players, they all demurred. Of course, Intel isn't talking.
When I spoke with NXP Semiconductors CEO Rick Clemmer last week, I asked him the same question—who are the so-called "big players" already using Intel as their foundry? "I've heard of that, too," replied Clemmer. "But I can tell you it's not NXP."
Looking to the future , where Intel may play a critical role as a foundry, we decided to dig deeper. We tapped our most experienced reporters on the semiconductor beat—Peter Clarke, Rick Merrit and Dylan McGrath—to weigh in.
Clarke argues that Intel is not going to become the next big foundry. "But it is a self-confessed technology explorer that is happy to disrupt the fabless/foundry system which supports such competitors as Qualcomm, Broadcom and others," Clarke says. "It's not your father's foundry business anymore." Perhaps, but it's now time for Taiwan Semiconductor Manufacturing Co. (TSMC) or GlobalFoundries to rethink the way they run their foundries.
Merrit concluded: "Foundry will never be more than a fun and modestly useful sideline for Intel." His take on Intel as a foundry: Don't hold your breath.
McGrath, while also skeptical about the possibility of Intel becoming a major player in foundry, nevertheless believes it would be foolish to rule the possibility out. Nobody knows how far Intel is willing to go in foundry, even Intel, McGrath argues.
I would argue that Intel will become a sizeable player in the foundry business. Therefore, I looked for hurdles Intel needs to overcome if it is indeed serious about entering the foundry business. I picked the brain of Semico Research analyst Joanne Itow to discuss Intel's strength and weakness as foundry.
First, Intel is the only company with a logic 22-nm process in production today. This is important especially since TSMC is ramping 28 nm, one generation behind Intel.
Second, Intel's strength is that it is "a true IDM," Itow noted. "Intel can provide services from design to manufacturing and packaging, one-stop shopping." Similar observations were shared by Achronix Chairman John Lofton Holt in a recent interview with EE Times.
Third, let's not forget Intel has plenty of resources ("both personnel and dollars," said Itow) and the company operates fabs worldwide. Intel''s fabs can "lower the risk from natural disaster or political instability," she added.
Fourth, there are clear business reasons that motivate Intel to enter the foundry business. Intel transitions its processor technology every two years. "In the 1990's, Intel migrated their older fabs to chipset production or flash production in order to extend the life of their fabs," observed Itow. "Today, they have to upgrade fabs or build new fabs. The foundry 'sweet spot' is typically one or even two nodes behind Intel's leading-edge processor technology," Itow added.
As the industry prepares for 450-mm production, Intel will have a significant amount of 300-mm capacity still viable at the foundry sweet spot, the Semico analyst noted. "Intel may be willing to provide foundry capacity at a very competitive price in order to bring new life to their 300-mm fabs."