The chipmaker’s come-from-behind strategy is risky and will take years, even with government subsidies.
I am sweltering inside an Intel chip factory outside Phoenix, bundled head-to-toe in a Gore-Tex suit to keep me from contaminating billions of dollars’ worth of the world’s most delicate fabrication equipment. As plastic pods of silicon wafers whiz from station to station along roof-mounted transit lines, there’s nothing about the room that feels outdated. Still, I think to myself: I’m looking at either the past or the future of American manufacturing.
That’s because Intel is at a fork in the road. One direction leads to a comfortable stasis as a processor designer, perhaps with a side business making chips with yesterday’s technology. Robert Rodriguez/CNET After squandering its lead because of a half decade of problems modernizing its manufacturing, that’s where Intel has been headed. The Silicon Valley icon ceded processor market share to longtime rival AMD, lost the Mac business to Apple’s in-house M-series chips , and fell behind Taiwan Semiconductor Manufacturing Co. ( TSMC ) and Samsung in making chips.
Pat Gelsinger , Intel’s new chief executive, wants to take the other course: restore the company’s status as the leader of the semiconductor industry, an enormously profitable innovator fueling each year’s advances in phones, PCs, smartwatches , internet services and everything else in our digital lives. Getting there requires a series of major manufacturing upgrades and delivery of a quartet of new chips those upgrades will enable: Alder Lake for gaming PCs this year and laptops next year, Ponte Vecchio and Sapphire Rapids for servers in 2022, and Meteor Lake for PCs in 2023. Intel will have to get everything right after years of getting much of it wrong.
With “a decade of bad decisions, this doesn’t get fixed overnight,” Gelsinger says in an interview. “But the bottom is behind us and the slope is starting to feel increasingly strong.”
Intel’s choice, to coast or to rebuild, is emblematic of one that the entire United States faces. Most of the country’s 20th century manufacturing leadership has migrated to Asia, particularly to China. Intel is among the most prominent examples of a company trying to keep US manufacturing vibrant . As I walk through its chip fabrication plants — “fabs” — Gelsinger’s plans are underway. In the CH4 fab, employees wheel around carts packed with Ponte Vecchio processors, assembled from dozens of smaller “chiplets” and likely destined for the Energy Department’s 2022 supercomputer, Aurora. Although Meteor Lake won’t arrive for more than a year, Intel is making dummy versions to debug new chip packaging technology.
More fabs are on the way, too. In an enormous empty patch of dirt at its existing Arizona site, Intel has just begun building fabs 52 and 62 at a total cost of $20 billion, set to make Intel’s most advanced chips, starting in 2024. Later this year, it hopes to announce the US location for its third major manufacturing complex, a 1,000-acre site costing about $100 billion. The spending commitment makes this year’s $3.5 billion upgrade to its New Mexico fab look cheap.
The goal is to restore the US share of chip manufacturing, which has slid from 37% in 1990 to 12% today. “Over the decade in front of us, we should be striving to bring the US to 30% of worldwide semiconductor manufacturing,” Gelsinger says.
Gelsinger has the ear of politicians, including folks in the Biden administration and the US Senate, which in June approved a bill to lavish $52 billion on US semiconductor companies that want to keep essential manufacturing in the US. On Wednesday, House Speaker Nancy Pelosi announced an effort to push the legislation forward through both houses of Congress. If passed into law, it could knock about $3 billion off the $10 billion price tag for each new fab, a subsidy level Gelsinger says would match those of Taiwan and Korea.
But returning Intel to its glory days — and anchoring a resurgent US electronics business in the process — is much easier said than done.
Making chips profitably means running fabs at maximum capacity to pay off the gargantuan investments required to stay at the leading edge. A company that can’t keep pace gets squeezed out, like IBM in 2014 or Global Foundries in 2018 . To catch up after its delays, Intel now plans to upgrade its manufacturing five times in the next four years, a breakneck pace by industry standards.
“This new roadmap that they announced is really aggressive,” says Linley Group analyst Linley Gwennap . “I don’t have […]
source Intel’s chip recovery plan could restore US manufacturing prowess
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