Intel Unveils Foundry Business Strategy to Regain Semiconductor Leadership

Intel reveals its foundry service plan, focusing on AI and advanced technologies to enhance chip quality and production efficiency, aiming to outperform TSMC.

Intel announced a comprehensive plan for its foundry business segment, marking a strategic move within its financial reporting structure to independently account for this division.

This initiative is part of Intel’s broader effort to reclaim its position as a leader in semiconductor manufacturing, challenging its main competitor, TSMC, particularly in the high-end chip production arena for clients like Nvidia and Apple.

tsmc 3nm chips production 2022

Under the leadership of CEO Patrick Gelsinger, Intel is embracing advanced technologies, including artificial intelligence, to refine its manufacturing processes. The company aims to leverage these innovations to boost profit margins and enhance chip quality, highlighting the strategic importance of the foundry business in reducing production costs and improving profitability.

Intel’s approach includes a focus on improving chip delivery speeds and testing times, essential factors in regaining orders previously dependent on third-party manufacturers.

Intel’s transition also involves segregating manufacturing costs into a new category within its financial reporting, offering clearer insights into production and development costs to investors. This restructured financial statement submission to the U.S. Securities and Exchange Commission underscores Intel’s determination to regain its competitive edge.

The company’s strategy involves a quick iteration of manufacturing processes, with plans to introduce five new processes within four years. Gelsinger emphasized the strong demand for Intel’s advanced 18A process technology among customers, marking a significant step in Intel’s competition with TSMC.

samsung 3nm process sram chips

Intel has already secured commitments from five customers for this technology, testing numerous chips as part of its ambitious plans to surpass TSMC.

Looking ahead, Intel is optimistic about the foundry business’s prospects in 2024. The management believes that by 2030, Intel Foundry Services will emerge as the world’s second-largest foundry enterprise, benefiting from the profit margin enhancements brought by Extreme Ultraviolet (EUV) lithography technology.

With contracts already worth $15 billion under this new business model, Intel is poised to maintain a 40% operating profit margin in its product division over the next decade, leveraging the advantages of its cost structure and EUV technology to solidify its market position.

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Intel Unveils Foundry Business Strategy to Regain Semiconductor Leadership

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