At this week's Canalys Forum EMEA event in Barcelona, AMD's Executive Vice President for Strategic Partnerships shared a candid perspective on Intel's ambitious decision to establish new foundries for manufacturing chips for other companies. In response to the question of whether Intel's venture would succeed, the executive didn't mince words, stating, "Of course not."
As reported by The Register, the Canalys Forum EMEA event is a gathering of prominent IT vendors, channel partners, and distributors who convene to discuss industry topics and developments. Currently, Intel is in the midst of constructing several new manufacturing facilities in North America, Mexico, and Germany.
However, Intel's expansion plans go beyond serving its own chip production needs. The company has actively sought fabrication contracts and recently struck an agreement with Arm to manufacture chips. This approach stands in stark contrast to the conventional practices of most processor companies, with AMD, for example, predominantly relying on TSMC (Taiwan Semiconductor Manufacturing Company) for its manufacturing requirements.
Darren Grasby, the AMD executive responsible for strategic partnerships, didn't hold back when asked about Intel's prospects in this endeavor. He pointed out the financial benefits that AMD reaped by divesting itself of its own foundries, channeling the savings into research and development.
AMD's decision to offload its foundries into the GlobalFoundaries business was essential at the time, given the company's precarious financial situation. Yet, this strategic move ultimately paid dividends. It not only allowed AMD to clear its debts but also facilitated the development and launch of significant innovations like the Zen architecture.
Beyond the playful banter, Grasby raised a valid point. TSMC currently commands a substantial share of the large-scale chip manufacturing market, even producing chips for Intel. This includes GPUs for Intel's Arc series of graphics cards and the graphics and System-on-Chip (SoC) components for the upcoming Meteor Lake CPUs.
While Intel is not lacking in financial resources and already allocates substantial sums to research and development, it makes sense for the company to invest in expanding its capacity for high-end chip production, particularly if it receives financial support from the governments of the United States and Germany.
The success of Intel's endeavor to compete with industry giants like TSMC and Samsung in the fabrication business could potentially be a game-changer for the company. On the other hand, if Grasby's skepticism proves accurate and Intel's expansion plan falters, the possibility of Intel's foundries being spun off into a separate division, akin to its recent FPGA segment separation, could become a reality. The outcome remains to be seen, but one thing is clear: the semiconductor industry is watching these developments closely.