Intel to Spend $20 Billion on Two New Fabs in Arizona, Will Pursue Apple as Customer [Video]

Intel CEO Pat Gelsinger has announced significant manufacturing expansion plans for the company, starting with an estimated $20 billion investment to build two new factories in Arizona. Gelsinger also revealed that Intel plans to become a major provider of foundry capacity in the U.S. and Europe to serve customers globally.

“We are setting a course for a new era of innovation and product leadership at Intel,” said Gelsinger. “Intel is the only company with the depth and breadth of software, silicon and platforms, packaging, and process with at-scale manufacturing customers can depend on for their next-generation innovations. IDM 2.0 is an elegant strategy that only Intel can deliver – and it’s a winning formula. We will use it to design the best products and manufacture them in the best way possible for every category we compete in.”

The new integrated device manufacturing model (IDM 2.0) combines the following three components…

1. Intel’s global, internal factory network for at-scale manufacturing is a key competitive advantage that enables product optimization, improved economics and supply resilience. Today, Gelsinger re-affirmed the company’s expectation to continue manufacturing the majority of its products internally. The company’s 7nm development is progressing well, driven by increased use of extreme ultraviolet lithography (EUV) in a rearchitected, simplified process flow. Intel expects to tape in the compute tile for its first 7nm client CPU (code-named “Meteor Lake”) in the second quarter of this year. In addition to process innovation, Intel’s leadership in packaging technology is an important differentiator that enables the combination of multiple IPs or “tiles” to deliver uniquely tailored products that meet diverse customer requirements in a world of pervasive computing.

2. Expanded use of third-party foundry capacity. Intel expects to build on its existing relationships with third-party foundries, which today manufacture a range of Intel technology – from communications and connectivity to graphics and chipsets. Gelsinger said he expects Intel’s engagement with third-party foundries to grow and to include manufacturing for a range of modular tiles on advanced process technologies, including products at the core of Intel’s computing offerings for both client and data center segments beginning in 2023. This will provide the increased flexibility and scale needed to optimize Intel’s roadmaps for cost, performance, schedule and supply, giving the company a unique competitive advantage.

3. Building a world-class foundry business, Intel Foundry Services. Intel announced plans to become a major provider of U.S.– and Europe-based foundry capacity to serve the incredible global demand for semiconductor manufacturing. To deliver this vision, Intel is establishing a new standalone business unit, Intel Foundry Services (IFS), led by semiconductor industry veteran Dr. Randhir Thakur, who will report directly to Gelsinger. IFS will be differentiated from other foundry offerings with a combination of leading-edge process technology and packaging, committed capacity in the U.S. and Europe, and a world-class IP portfolio for customers, including x86 cores as well as ARM and RISC-V ecosystem IPs. Gelsinger noted that Intel’s foundry plans have already received strong enthusiasm and statements of support from across the industry.

To accelerate Intel’s IDM 2.0 strategy, Intel will build two new fabs in Arizona, located at the company’s Ocotillo campus. These fabs will support the increasing requirements of Intel’s current products and provide committed capacity for foundry customers. The build-out is expected to create over 3,000 permanent high-tech, high-wage jobs; over 3,000 construction jobs; and approximately 15,000 local long-term jobs.

Notably, Intel plans to pursue Apple as a customer for its new foundry capacity, despite having just launched an aggressive advertising campaign against the company.

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“We’re also going to go to some, like you saw in our announcements today, people like Qualcomm who might have been more competitive before and we’re now going to say ‘Hey, let’s find ways to leverage our technologies in ways that weren’t possible before and can we become your foundry partner’.”

“We also will pursue customers like Apple and say, ‘Boy, you know are we possible to build and expand on your foundry capabilities as well?'”

“We’re also seeing this as our foundry capabilities, we’re expanding the relationships that we have with TSMC, Samsung, UMC and Global Foundries and leveraging them as well. So this is clearly a coop-petition story and one that by managing our business judiciously, by creating more business opportunities, leveraging our world-class ip portfolio, we see IDM 2.0 as a unique strategy for Intel and one that the world needs right now and we can deliver at scale a powerful
accelerant to meet the growing demands for semiconductor technology on a global basis. That’s something available to us and we’re excited to go execute on this effectively and create many more partners and customers across the industry as a result.”
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You can watch the full announcement video below for more details and download the iClarified app or follow iClarified on Twitter, Facebook, YouTube, and RSS for updates.