When Intel struggled with its 10nm process technology a few years ago, some investors suggested that the company would be better-off spinning its chip production into an independent foundry, leaving the core of the company to focus on chip design instead. Bucking these calls, however, Intel opted to keep chipmaking in-house, even going as far as to creating Intel Foundry Services to use those facilities to do contract chipmaking for other chip designers.

With the significant capital required to scale up the chip fab side of the business, it's a decision that, even today, Intel executives still get asked about. That was once again the case yesterday, at Intel's investor-focused AI Everywhere event at the Nasdaq MarketSite, where Intel CEO Pat Gelsinger reiterated that the company is not going to spin off their foundries.

"The idea of the internal foundry model, we think, is the right path for us in the current environment," Gelsinger told Reuters.

IFS is currently a distinct manufacturing operations unit within Intel that operates like 'an internal foundry', which the company then 'outsources' production of its processors and other products. Since returning to Intel, Gelsinger has been steadfast about wanting IFS to stay that way, keeping IFS an internal unit rather than to spin it off. It's a decision that's been in notable contrast to some other Intel divisions, such as Mobileye and the Programmable Solutions Group, which have been (or will be) spun off into separate businesses.

With that said, Intel will be bringing more transparency to the financials of its foundry division. Starting from Q2 next year, Intel will report financial results of IFS as if it was a separate business, which will give a clear understanding how much the unit earns and provide a better understanding of how IFS operations stack up against those of TSMC, Samsung Foundry, GlobalFoundries and other top contract chipmakers.

Ultimately, Intel believes that there are clear benefits to operating in a unified manner, especially, as explained by Gelsinger in his interview, that Intel is using the majority of the factory's capacity right now.

Source: Reuters

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  • evanh - Sunday, December 17, 2023 - link

    The PC made Intel what it is today, I should say.
  • evanh - Sunday, December 17, 2023 - link

    Itanium proved that in spades.
  • do_not_arrest - Wednesday, December 20, 2023 - link

    This rhetoric of "the pc made intel" and not the other way around is just a bunch of BS by people who don't know what they are talking about and weren't around in the 80s to see it happen. IBM was looking for a supplier, and Intel made a HUGE bet (they essentially bet the whole company) that they could pivot from memory to CPUs and be successful that way. The x86 instruction set was designed to reduce memory usage and provide programmers with maximum flexibility. Back on those days, memory was extremely limited and VERY expensive. They bet the company that they could make the chip on time, in high volumes, and cheap enough for mass market PCs. Then they delivered on their promise. The low cost and strong supply of CPUs from Intel opened the door for many different companies to make PCs which drove the price down and caused massive growth in the industry.
  • evanh - Thursday, December 21, 2023 - link

    Sure, Intel was smart and ran with it, but the PC was steam-rolling its way with or without Intel.
  • evanh - Thursday, December 21, 2023 - link

    In fact the PC didn't require even the x86 architecture to do that. It could have been quite a different outcome if IBM chose differently.
  • FunBunny2 - Thursday, December 21, 2023 - link

    "In fact the PC didn't require even the x86 architecture to do that"

    the Moto 68xxx chips made more sense, technically, but Intel gave (well, begged for) IBM a better deal. again, it would have made no difference. the quality of the chip wasn't what made the 8086/8 lusted for, it was 1-2-3 and Mitch would have written it in whatever assembler was available. little remembered fact - for the first few years (may be 2) IBM would sell the PC with whatever OS the user wanted (well, among 3) - UCSD p-System, CP/M 86, or PC/DOS. Uncle Bill owes Mitch a large debt, since Mitch wasn't going to write 3 versions of 1-2-3 and chose PC DOS for reasons I don't recall.
  • FunBunny2 - Thursday, December 21, 2023 - link

    "PC was steam-rolling its way with or without Intel"

    without 1-2-3, IBM would have been right - 2,500 units/year would have been about right; a Tonka steamroller, at best. the PC was envisioned as a miniature (very, very) mainframe - the user would write bespoke code to do bespoke tasks, just smaller. the notion that the PC would end up being an appliance where the 'user' ran some packaged code (bunches of them, it turned out) was never considered. what's odd, of course, is that there already was a spreadsheet package in fairly wide use, but on 8 bit machines: VisiCalc. it was so common that Mitch copied most of it to make 1-2-3. lawsuits ensued.
  • Threska - Friday, December 15, 2023 - link

    "With the significant capital required to scale up the chip fab side of the business, it's a decision that, even today, Intel executives still get asked about."

    Putting that at arms length doesn't change the problems. Plus they'd have to go head to head with others for the same customers.
  • edzieba - Monday, December 18, 2023 - link

    Bingo. We already saw this in action with GloFo:
    "Oh no, fitting out for new processes is getting expensive!"
    "Let's sell off our fab arm, then we don't need to pay for new processes ourselves!"
    "Whoopee, now we don't have to invest in fab upgrades but we get the upgrades for free"
    "What, the lack of investment in fab upgrades means there AREN'T any fab upgrades? We're stuck on 14nm until we can port our architecture to a new process, company, AND design toolchain?"
  • lmcd - Friday, December 22, 2023 - link

    Their most important architectures for profitability (Atom, whatever their NPU name is, and Arc) are already ported and I'm sure that they have assessed the viability of moving Core over as well. They are not living off a shoestring budget and hoping their last shot at a viable consumer product lands before they hit literally 0 ODM wins. They are absolutely not in AMD's position.

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