Intel Might Wait for New CEO to Make Outsourcing Decision: Report

Pat Gelsinger

(Image credit: VMware)

According to a report from The Oregonian, current Intel CEO Bob Swan told Intel employees during an all-hands meeting that the company may delay its decision to outsource some of its core logic to outside firms until Pat Gelsinger, Intel's CEO-elect that will join the company in mid-February, has time to weigh in on the decision. “We expect to make that decision very soon,” Swan told employees, “but we’re going to do it with Pat.” Intel has not confirmed the report.

Intel had previously announced that it would unveil its plan, which will see Intel outsource the production of leading-edge CPU and GPUs to a competing fab for the first time in its history, during the company's Q4 2020 earnings call on January 21, 2020, saying "the company has made strong progress on its 7nm process technology." 

Incoming CEO Gelsinger was also a participant at the meeting, reportedly telling employees that "We have to deliver better products to the PC ecosystem than any possible thing that a lifestyle company in Cupertino [makes],” in reference to Apple, which recently began to transition to its own ARM-based M1 processors, severing its decades-long reliance on Intel chips for its PCs. “We have to be that good in the future,” Gelsinger noted. 

The news that Intel hasn't fully decided its outsourcing strategy could cool industry speculation that TSMC, which revealed a remarkable expansion plan today that includes $28 billion in additional CapEx investments in 2021, has already inked a deal with Intel. Intel has several options at its disposal. During a recent interview, CEO Bob Swan told us that the company could even use a competitor's process node technology inside its own fabs. Regardless of the strategy, Intel has communicated a sense of urgency around its decision, saying that potential partners will need to begin planning soon to meet Intel's target production dates. 

Gelsinger, who will take the helm as Intel CEO and join the board of directors on February 15, has a storied 30-year history with Intel. Gelsinger was the architect of the original 80486 processor. As Intel's first Chief Technical Officer, he created the company's tick-tock methodology and helmed the creation of 14 generations of Xeon and Core processors.    

Under the mentorship of then-Intel CEO Andy Grove, Gelsinger played a pivotal role in building the products that established the company as a dominant force in the semiconductor industry, working alongside industry legends like Gordon Moore and Robert Noyce. Gelsinger left Intel in 2009 for successful stints at EMC and VMware, and many have compared his return to Intel to Steve Jobs' return to Apple. 

Gelsinger was previously under consideration for the Intel CEO position in both 2013 and 2018 but stated both times publicly that he didn't want the job. Intel wooed Gelsinger away from his CEO position with a $116 million package, a nice step up from his current $42 million annual salary at VMware. Gelsinger's contract is heavily weighted towards performance incentives – he could make considerably more, or less, based on how the turnaround progresses.   

Paul Alcorn
Managing Editor: News and Emerging Tech

Paul Alcorn is the Managing Editor: News and Emerging Tech for Tom's Hardware US. He also writes news and reviews on CPUs, storage, and enterprise hardware.

  • waltc3
    I wish Intel luck...but it should never be forgotten that the new CEO had something to do with Itanium--a huge Intel flop that saw the company toss away billions of $ after bad. How much he had to do with it I haven't researched--but it never got off the ground even with Intel giving it away in the end. And the reference to Apple is likely the result of Apple dropping Intel for it's own CPU for what's left of Apple's real computing devices (Company is 90% dependent on cell-phone income.) Yes, Intel will have to do better than AMD as the M1 isn't even a factor today on anyone's radar scope. Internet pundits, as usual, are unduly impressed by a few benchmarks...ah, shades of Larrabee...;)

    Edit: wanted to add that for 2021 the news is that AMD has for the first time become TSMC's largest customer, pushing Apple to 2nd place by reserving a larger capacity. So...where does that leave Intel for 2021? Things are really getting interesting. I would not want to explain to my stockholders why my huge, expensive FABs simply cannot compete with TSMC.
    Reply
  • javiindo
    Is x86-64 architecture obsolete? Is ARM the future?
    Reply
  • JayNor
    There is a place for low power solutions, especially if they are low enough so a fan isn't required. Apple can provide that with their M1 ARM chip, as a benefit of building on TSM 5nm.

    However, there is also a place for PCIE4 on the TGL laptop chips ... providing access to the full performance of the fastest new SSDs. Intel is also providing 20 lanes of pcie4 on their announced TGL-H, which will support the same high speed interface on recently announced GPU chips. So, we will see if Apple can compete in that segment... although certainly at a disadvantage if they want to maintain a fanless feature.
    Reply
  • JayNor
    Intel demoed an Alder Lake desktop at the end of Bryant's CES demo. The Alder Lake chip will include relatively low power Gracemont cores.

    Intel already builds P5900 family chips with up to 24 Tremont cores, which are the predecessor of Gracemont.

    I suspect Intel's Alder Lake-P versions will provide configurable options for fanless laptops. Intel's Lakefield, with Sunny Cove and Tremont cores, is already used in fanless products.
    Reply
  • redgarl
    Apple M1
    TSMC 5nm
    ARM uarch
    16+ hours of battery life
    About the same ST performances than Ryzen mobile 5000u
    About 30% less MT performances compared to Ryzen mobile 4000uAMD Ryzen mobile 5000u
    TSMC 7nm
    x86 uarch
    20+ hours of battery life
    About the same ST performances than M1
    About 40% better MT performances than M1Conclusion, x86 is dead! /SARCCASM
    Reply
  • javiindo
    redgarl said:
    Apple M1
    TSMC 5nm
    ARM uarch
    16+ hours of battery life
    About the same ST performances than Ryzen mobile 5000u
    About 30% less MT performances compared to Ryzen mobile 4000uAMD Ryzen mobile 5000u
    TSMC 7nm
    x86 uarch
    20+ hours of battery life
    About the same ST performances than M1
    About 40% better MT performances than M1Conclusion, x86 is dead! /SARCCASM

    There are not reviews yet to compare the new ryzen mobiles. What we know is that apple doesn't even neeed a cooler and AMD is going to need one. With the same battery and same screen I don't see how AMD can beat apple on battery life.
    Reply
  • javiindo
    JayNor said:
    There is a place for low power solutions, especially if they are low enough so a fan isn't required. Apple can provide that with their M1 ARM chip, as a benefit of building on TSM 5nm.

    However, there is also a place for PCIE4 on the TGL laptop chips ... providing access to the full performance of the fastest new SSDs. Intel is also providing 20 lanes of pcie4 on their announced TGL-H, which will support the same high speed interface on recently announced GPU chips. So, we will see if Apple can compete in that segment... although certainly at a disadvantage if they want to maintain a fanless feature.

    In most cases you will not even notice the difference between SDD and NVME. And for gen4 AMD is going gen 3 because gen 4 is consuming too much power. Gen 4 on a laptop it's just marketing.
    Reply
  • javiindo
    JayNor said:
    Intel demoed an Alder Lake desktop at the end of Bryant's CES demo. The Alder Lake chip will include relatively low power Gracemont cores.

    Intel already builds P5900 family chips with up to 24 Tremont cores, which are the predecessor of Gracemont.

    I suspect Intel's Alder Lake-P versions will provide configurable options for fanless laptops. Intel's Lakefield, with Sunny Cove and Tremont cores, is already used in fanless products.

    Apparently Windows is not ready for that technology at all. We will see if there is any improvement. And if they want to compete with ARM in energy/power they are going to work a lot.
    Reply
  • Gurg
    By producing its own chips in house Intel actually has performance product available for sale in stores. AMD 5k series CPUs and 6k series GPUs in contrast are mostly all thunder in reviews with little lightening actually hitting the ground in stores for sale.
    Reply