(Bloomberg) – Intel Corporation unveiled a grand plan on Tuesday to restore the glory of its past chipmaking. To be successful, the new chief executive officer, Fischer Pat Gelsinger, must adopt a strategy that the old Intel never dreamed of: playing well with rivals.
“Intel is back. The old Intel is the new Intel, ”he said. “We are going to be the market leader and we are going to satisfy new foundry customers, because the world needs more semiconductors and we will bridge that gap in a powerful and meaningful way.”
Intel shares are up 7% on the plan. Yet the main part of the strategy is a new area for the company that is used to doing everything its way. Intel has always designed and manufactured in-house of its semiconductors. Now, Gelsinger is starting a foundry business that will make chips for other companies. And there are also plans to use rival factories to outsource the production of more Intel components.
This will create complex new relationships. For example, a Taiwanese semiconductor manufacturing company runs the world’s leading chip foundry business. Intel is now encroaching on TSMC’s turf, while also expecting this rival to make some of Intel’s best chips.
“TSMC is as much for Intel as it is for them,” said Matt Rams, an analyst at Kaven & Kunj.
Read more: Intel’s 20 20 billion foundry plan TSMC, Samsung’s shares hits
Before other chip companies commit to using Intel’s factories, it will have to fix its own production problems, the analyst added. Intel’s latest 7-nanometer production process has been delayed and follows many missing deadlines for the previous 10-nanometer standard. Gelsinger said Tuesday that the issues have been fixed, but analysts are skeptical.
“We don’t easily understand why consumers strongly support Intel’s foundry, that Intel lags far behind Procell technology, and does not yet have the libraries needed to compete with TSMC,” said Chris Caso, Raymond’s analyst. James.
Apple Paul Inc., a Bloomberg Intelligence analyst, said. And big tech companies like Qualcomm Inc. will be reluctant to change orders to Intel as they compete with the company in designing chips.
TSMC can fight Intel challenge in chip manufacturing: Feedback
Gelsinger began his career at Intel in 1970 and operated several of its larger units. When Intel used its strategy to reach its destination in 2009, it helped put it in place. Intel introduced new products and new manufacturing technologies that competitors could not match, and PC and server customers built its product cycle around it. When he mentioned on Tuesday that he would return to the “tick-tuck” discipline, Gelsinger asked software maker VMware Inc. to navigate a more complex world for Intel. Leaning on recent experience gained as head of no.
During a presentation with analysts on Tuesday, Gelsinger said the way semiconductors are designed and manufactured has changed. Parts of the chips can now be made in different locations using different techniques, then combined into packages. This helps designers choose and choose the one that best suits their needs – and it makes the old Intel model to keep them all under one roof.
Intel displayed the logos of Qualcomm and other companies that said its foundries were supporting the pressure. China and the U.S. Meanwhile, in the wake of growing geopolitical and trade tensions, consumers want suppliers with facilities outside Taiwan, Intel said.
Read more: The world is dangerous for semiconductors on Taiwan
Gelsinger is advancing it by doing something that his predecessors would have considered a sacrament. Intel uses its X86 processor technology to protect against jealousy, an effective instruction for computer microprocessors. It will now be available as a design if Intel Foundry customers want to use it. And they can combine this with rival approaches offered by Arm Ltd and an open source standard called RISC-V, he said. Intel has tried as a foundry before and failed. The effort is different because customers will have access to Intel’s best manufacturing technology, Gelsinger said. And at least two new factories are being built for the effort. “Our past efforts were somewhat heartfelt,” Gelsinger said. “Customers will get what we offer.”
New Intel CEO May Drive EPS Improved, Evaluation: Company Outlook To clarify its goals internally, Gelsinger has set up a separate department that will report on its own financial performance and therefore have to align itself with customer interests to ensure. Cody Acre, an analyst at Loop Capital Markets, said in an interview with Bloomberg Television that “if it is really dedicated to the benefits today, it will put Intel on a more competitive footing.” “You’re going to get this honeymoon period that Mr. Jailsinger is today where people are looking for change, looking for optimism, anything with Intel. That’s the decent thing to do, and it should end there. But it is also very shortlifted. “
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