Intel shakeup to create internal foundry model

Intel shakeup to create internal foundry model

Business news |
By Nick Flaherty

Intel is stepping up its move to foundry by offering the same service to both internal and external chip makers with a new ‘IDM2.0’ manufacturing model.

“When I returned to Intel in 2021, I introduced our IDM 2.0 strategy: a multiyear journey to regain unquestioned technology leadership, manufacturing scale and long-term growth. Today, we begin the next phase of our IDM 2.0 journey,” Intel CEO Pat Gelsinger told staff.

“In the first phase of our transformation, we made significant progress on our process roadmaps and capacity. We remain on track to deliver five process nodes in four years, and we’ve invested in the capacity required to meet the industry’s demand for semiconductors, bringing much-needed balance to the global supply chain.”

This is part of the chiplet strategy to reach devices with a trillion transistors in a package, and follows plans to layoff thousands of staff as the consumer PC market collapses.

“The next phase of our IDM 2.0 journey requires a fundamental shift in mindset,” said Gelsinger. “We must embrace an internal foundry model, not only for our external customer commitments but also for our Intel product lines. This is a significant evolution in how we think and operate as a company, but the systems and infrastructure that served us well in the IDM 1.0 world will not enable us to achieve the full potential of IDM 2.0. 

Implementing an internal foundry model means establishing consistent processes, systems and guardrails between the internal business unit, design and manufacturing teams. This will allow Intel to identify and address structural inefficiencies that exist in the current model with real time data, he says. “It will also put Intel’s product groups on a similar footing as external Intel Foundry Services customers and vice versa,” he said.

This is a key point, as many external chip customers have been worried that they will come second to Intel’s own business, especially in times of shortages. Smartphone chip maker Mediatek is the only major chip maker to publicly sign up for the programme so far.

Gelsinger has set up an IDM 2.0 Acceleration Office, which will be led by Stuart Pann, Senior Vice President of the Corporate Planning Group (CPG) and now also Chief Business Transformation Officer, reporting to Chief Financial Officer Dave Zinsner as part of the  executive leadership team. The IDM 2.0 Acceleration Office will work in close collaboration with all business units and functional teams.

“We will also create a foundry accounting model that encompasses manufacturing, technology development and Intel Foundry Services,” he said. “This will give us more transparency into our financial execution and will allow us to fully benchmark and drive ourselves to best-in-class foundry performance.

“Our business unit and design teams will be able to consider the potential impact on their margins if they want to run an additional product stepping, while the manufacturing team will be able to assess requests based on actual costs and impact on factory output,” said Gelsinger. “This will give teams the tools and transparency they need to find the most effective and cost-efficient solutions before implementation in silicon, ultimately helping us maximize factory output, reduce costs and shorten design cycles.

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