xLight, a U.S.-based startup developing an EUV light source based on a particle accelerator, on Tuesday signed a Letter of Intent (LOI) with the U.S. Department of Commerce for $150 million in proposed federal incentives under the CHIPS and Science Act. xLight came out of the blue earlier this year when it hired Pat Gelsinger, former chief executive of Intel, as executive chairman. The money, if awarded, will be used to bring xLight's free-electron laser (FEL) based light source closer to reality once it is built in Albany and its viability is proven in practice.

$150 million from the Trump Administration

"With the support from the [Department of] Commerce, our investors, and development partners, xLight is building its first free-electron laser system at the Albany Nanotech Complex, where the world's best lithography capabilities will enable the research and development that will define the future of chip manufacturing," said Nicholas Kelez, CEO and CTO of xLight.

The Trump administration has been particularly sceptical about Joe Biden's CHIPS and Science Act, claiming that it is a waste of taxpayers' money. However, it looks like the U.S. government has changed its mind with xLight, which promises to develop a new FEL-based light source for EUV lithography tools that would replace traditional laser-produced plasma (LPP) sources based on CO2 lasers. If xLight succeeds in building its technology and wedding it to ASML's lithography scanners, then the U.S. will control an important part of the global supply chain for these tools, which is perhaps something that got the current American leadership.

"Building an energy-efficient EUV laser with tenfold improvements over today's technology will drive the next era of Moore's Law, accelerating fab productivity, while developing a critical domestic capability," said Pat Gelsinger, Executive Chairman of the Board, xLight, and General Partner, Playground Global.

Note that in deals like the one announced between xLight and the U.S. DoC, an LOI is a non-binding agreement in principle: it signals that both sides intend to move forward, but it does not obligate the government to release funds or the company to receive them, though it means that the government has finished a preliminary evaluation and selected the company for potential funding. xLight will now work with the U.S. DoC and teams at the Albany Nanotech Complex, so expect further disclosures in the coming months. In parallel, the company will continue its joint development work across the Department of Energy lab network.

A breakthrough technology

xLight is developing a FEL-based light source that can be used to deliver coherent EUV radiation directly to existing ASML wafer scanners. The approach is significantly different from LPP-based light sources that ASML (well, its U.S.-based Cymer unit) once developed for its current litho tools.

xLight gets powerful FEL by first using a particle accelerator, which speeds up electrons to very high velocities with radiofrequency (RF) and magnetic fields; these fast particles are then fed into an FEL, where the electrons from the accelerator pass through undulators that create a periodic magnetic field and, as a result, generate coherent, high-intensity light beams featuring required wavelengths (13.5nm in case of EUV, though scalable to 2nm for soft X-ray). The FEL is housed in a separate facility adjacent to the fab (i.e., not inside the cleanroom). Once EUV light is generated, it is piped via a network of specialized grazing-incidence mirrors with turning stations to multiple ASML scanners, up to 20 per FEL unit. This light then enters the scanner's illuminator, where it is shaped and directed onto the wafer.

As there is no plasma conversion step, xLight claims that its device enables higher brightness, narrower spectral width, and femtosecond pulses for sharper patterning. However, the company has yet to prove two critical things: that its technology works in general and is viable for mass production of semiconductors. The latter will arguably be harder than the former, as xLight will have to find a company with multiple Low-NA (or better High-NA) EUV tools that is willing to conduct experiments with scanners that cost around $200 million (nearly $400 million for High-NA EUV) a unit.

Furthermore, since xLight uses a DOE lab network, at least some of the elements of its technology may be classified, meaning that the company will have trouble exporting them to other countries in any form. On the one hand, this might give America an edge when it comes to lithography, but on the other hand, this might also slow down adoption of the technology.

Pat Gelsinger has shared the story of how his initials remained on the Intel 386 silicon die, despite them being spotted by the top brass during a pre-production design review session. Creating such inscriptions "was not done," during this era at Intel, remembers Gelsinger. Nevertheless, the legendary true-blue Intel man says he uttered “some complete nonsense about substrate tap configuration experiments” to swerve a comment on the 'PG' silicon markings by the gruff (then-CEO) Andy Grove. The end result is that Pat Gelsinger's initials are etched directly into the silicon of every 386 processor ever made.

The story goes that Gelsinger and his team of fellow architects and engineers were gathered in a conference room poring over “a huge 25x25 foot printout of the [i386] chip, magnified so we could see every little detail.” This was a part of the design review stage of a chip at the time.

During the review session, the team was excited by the arrival of Grove, invited by the youthful (~25) rising star Gelsinger. However, they grew apprehensive as the Intel CEO du jour took some time to review the detailed printout.

Spotting the famous ‘PG’ initials etched into the chip design, Gelsinger recalls that a gruff Grove grumbled, “What’s this?” People were expecting some kind of outburst or rebuke from the company’s then-leader.

Gelsinger suggests he quickly took the bull by the horns, and “responded with some complete nonsense about substrate tap configuration experiments for the optimal leakage current collection effectiveness (said in a tense but convincing tone).”

Gelsinger admits his response was “total BS.” He got the impression that witnesses to this verbal/technical joust were thinking “Pat’s dead!” due to Grove’s then-legendary temper. However, the then-CEO apparently just said “OK,” seemingly swallowing the explanation whole.

Thus, Gelsinger’s personal stamp of chip architect authorship remained on the i386, despite being a blithe ~25-year-old at the time. Subsequently, his initials were also on the i486 silicon. On the more advanced chip, you will see PG, again, as well as JR. The latter is short for ‘Johnny Reb, ’ fellow chip architect John H. Crawford’s nickname.

Grove’s perspective, Gelsinger's travels

Did the explanation about the substrate tap configuration experiments wash with Grove, or was he simply being lenient with a clearly budding talent at Intel? We can only guess about that aspect of this story.

Holocaust survivor Andy Grove passed away in March 2016. He is remembered for being one of the first three employees of Intel, alongside founders Gordon Moore and Robert Noyce. Grove also oversaw the rise of the x86 architecture, stewarding the chipmaker from a $4 billion to a $200 billion valuation.

Pat Gelsinger retired from Intel under difficult circumstances but is currently busy helping companies such as xLight, Gloo, Playground Global, and Snowcap Compute.

Pat Gelsinger says we’re already in an AI bubble, but says it could be several years before anything bad happens. The former Intel CEO was asked during an interview on CNBC if we’re in an AI bubble, stating, “There’s a lot of leverage in the system, there’s a lot of cash, but then there’s a whole bunch of other folks who are trying to build these data centers. Whether there’s the energy component side of it, or whether you think about the real estate component, I mean, there’s just a whole lot of things happening at one time.”

“Are we in an AI bubble? Of course, we are. We are hyped, we’re accelerating, we’re putting enormous leverage into the system,” Gelsinger answered. “With that said, I don’t see it ending for several years. I do think we have an industry shift to AI. As Jensen (Huang) talked about, and I agree with this, you know that businesses are yet to really start materially benefiting from [it]. We’re displacing all of the internet and the service provider industry as we think about it today — we have a long way to go.”

Despite the disruption that AI has put on some industries, Gelsinger believes that we still have quite a way to go before we see the AI bubble burst. Continuing improvements in semiconductor efficiency would allow the industry to go further before running into trouble, the former CEO added, stating some changes will start materializing later in the decade. As such, he believes that nothing could change in the state of play for several years, despite radical improvements to AI he acknowledged had transpired in the last year alone.

Many experts are starting to get worried about the AI bubble, especially as companies are investing billions into the technology without seeing real returns yet. Even big institutions like the Bank of England and the International Monetary Fund are worried about it, saying we’re already halfway into a crash that could erase trillions in value. Still, tech companies continue investing and building massive data centers, like OpenAI’s planned gigawatt facility in India. These projects aren’t just costing money and energy — they’re also affecting global memory and storage supply, leading to a price crunch for just about everything that needs them.

If the AI bubble bursts, a lot of industries will be affected. While those working in the semiconductor and AI space will be hit the hardest, financial institutions would also be gravely affected — especially those that have heavily invested in companies like Nvidia and OpenAI. And while the average person might think they’re safe because they do not own stocks in these companies, their banks, pension funds, and other financial instruments likely are, causing widespread chaos if and when this happens.

Legendary Intel CTO and CEO Pat Gelsinger is now serving as executive chairman at xLight, a startup developing a free electron laser (FEL) technology as a light source for extreme ultraviolet (EUV) lithography systems.

Using a particle accelerator to generate light for litho machines has been discussed previously, but xLight claims it can produce such a source by 2028 — while maintaining compatibility with existing tools.

"As part of my new role at Playground Global, I have joined xLight as executive chairman of the board," Gelsinger wrote in a LinkedIn post. "I will be working closely with Nicholas Kelez and team to build the world’s most powerful Free Electron Lasers (FEL) by leveraging particle accelerator technology."

EUV lithography is an advanced technique used for semiconductor manufacturing to create extremely small — we are talking about an 8nm resolution for High-NA EUV and a ~13nm for Low-NA EUV — circuit patterns on silicon wafers that uses EUV light with a 13.5nm wavelength. At present, only ASML can build EUV litho systems and these use an intricate way of producing light with a 13.5nm wavelength.

There is more than one way to create a light with an extremely short wavelength to produce chips with an 8nm ~ 13.5nm resolution, however. One of them is to use a particle accelerator as a laser produced plasma (LPP) light source.

xLight has created an LPP source that delivers four times the power of the most advanced systems available today, according to the Gelsinger's post. ASML's Twinscan NXE:3600D has a 250W LPP source, whereas the NXE:3800E is equipped with a ~300W source.

While ASML has demonstrated EUV source powers above 500W in research settings, these higher power levels are not yet available in commercially deployed systems. Yet ASML continues to work towards increasing EUV source power, with plans to double output to 600W and a roadmap extending beyond 1,000W.

Apparently, xLight and Gelsinger claim that the company has an LPP source that is beyond 1,000W today and that will be ready for commercial applications by 2028.

Gelsinger claims that xLight's technology cuts per-wafer costs by around 50% and lowers both capital and operating expenses by threefold, which is a major leap in manufacturing efficiency. While we do know the approximate price of ASML's Twinscan NXE:3800E (around $240 - $250 million), we do cannot really guess the price of the light source alone.

Meanwhile, the claim that the new LPP source can lower capital expenses and operating costs by three times can potentially mean a substantial decrease of a FEL-based litho tool cost compared to today's machines from ASML.

Speaking of ASML, it is important to note that xLight does not aim to replace ASML's EUV litho tools, but produce an LPP source that "will be connected to an ASML scanner and running wafers by 2028." This may mean that xLight's LPP source will be compatible with existing ASML tools, but it is unclear whether it will be compatible with next-generation High-NA EUV tools (most probably yes, as they use the same LPP sources as existing Low-NA EUV tools). It also remains to be seen whether xLight's LPP source can be attached to TwinScan machines in fab environments.

Remember that fabs are built to accommodate specific tools and in case of Low-NA EUV systems it means that the light source is located below the machine itself, whereas in case of High-NA EUV tool its LPP source is located on the same level, so any 'third party' LPP source has to take these facts into account. For now, the particle accelerator looks rather big for existing fabs, so FEL is probably applicable for next generation of fabs if it is proved efficient.

It is noteworthy that while xLight believes that its FEL technology represents a multi-billion-dollar opportunity in the long term, it also opens near-term revenue in other key areas. The company believes that its systems are well-suited for high-power metrology and inspection tools. Perhaps, even beyond semiconductors, as it can address challenges in national security and biotech: from point defense and space debris control to medical imaging and scientific research.

Pat Gelsinger became chief executive of Intel back in 2021 with the aim to turn the company around and regain process technology and product leadership over several years. He was ousted in late 2024 before the job was done, but he remains strongly supportive of the company's mission, so he wants to see the new CEO — Lip-Bu Tan — to finish what he started, he said in an interview with CNBC.

"I was committed to and wanting to finish that story on the revitalization of Intel and with the board, the company, and now with Lip-Bu's leadership, you are really cheering them on to finish, because the role that Intel plays in the semiconductor industry is critical and one that's important not just for the industry but for the U.S., so I could not be more supportive of the team and Lip-Bu to finishing their journey," said Pat Gelsinger.

The challenges Intel faced, particularly around funding and market expectations, made the transformation extremely difficult. Gelsinger pointed out that one of the biggest obstacles was the financial burden of building a next-generation fabrication network. He noted that his IDM 2.0 strategy — under which Intel remains a vertically integrated maker of its own chips and a contract chipmaker with third party clients — was still the correct one, but acknowledged how capital-intensive and demanding it is for any company.

As Intel's core business declined faster than expected, it became clear that external capital was needed to fund the initiative.

"It is a heavy assignment, and for any company to carry the financial requirements of building next-generation technology fab network, it is very heavy in terms of capital returns required and the investments required to go accomplish that," Gelsinger acknowledged. "As Intel's core business was challenged and deteriorated more quickly than many people expected, there was just such a need for capital to come from elsewhere."

The former CEO of Intel also criticized the short-term focus of financial markets, which he said clashed with the long-term nature of the transformation Intel was undergoing. He described the tension of trying to execute a multi-year strategic shift while meeting quarterly financial expectations, emphasizing that such balancing was extremely difficult. He noted that this is exactly what Lip-Bu Tan will face in the coming quarters.

"As I have spoken about, the short-termism of Wall Street makes that very challenging and why, yet again, I would say my very best to Intel and Lip-Bu in finishing that seminally important journey," said Gelsinger. "Being a CEO for a transforming public company I truly think is one of the hardest jobs available, because you are trying to do a five-plus-year transformation on a 90-day shot clock, with heavy financial expectation — that is hard."

In summary, Pat Gelsinger made it clear that despite leaving, he wants Intel — the company that he spent decades in — to succeed and believes in the path the company is on. He reiterated his full support for both the board and Lip-Bu Tan as they continue forward with the IDM 2.0 vision.

Pat Gelsinger, former CEO of Intel and VMWare, announced on Monday that his role at faith-focused technology company Gloo has been expanded, and he will become the company's executive chairman as well as head of technology who will be in charge of products development. After nearly 10 years as a board member and investor, he is now leading Gloo's product and engineering efforts, with a focus on building a vertical cloud platform for the faith ecosystem. 

"Effective today, I have been named Gloo's executive chair and head of technology," Pat Gelsinger wrote on LinkedIn. "I have been involved with Gloo for almost 10 years, both as a board member and investor. Gloo's focus on creating a technology platform that connects and catalyzes the faith ecosystem perfectly aligns with my own sense of purpose."

Among the first projects that Pat Gelsinger will lead at Gloo will be the creation of one of the first vertical industry clouds for faith and advanced values-aligned AI. Earlier this year Pat Gelsinger praised DeepSeek and announced that Gloo would use it over OpenAI’s models for its AI chatbot Kallm, due to its open-source nature and ease of integration. Despite controversy surrounding DeepSeek's data practices, allegations of distilling ChatGPT data, and using Nvidia's smuggled GPUs to train its models, Gelsinger noted its affordability and potential to push the industry toward more open, efficient AI development.

"Across all of our efforts we are deeply committed to open-source, trust through transparency and benchmarking, and licensing of content for training and use of AI," Gelsinger wrote. "I see tremendous opportunity ahead for Gloo and I couldn’t be happier to partner with CEO Scott Beck and the rest of the leadership team as we prepare for our next phase of growth. I will have a few more updates to share on this new chapter in the coming days. Gloo will be a major focus… but there is a bit more to come."

Gloo is a tech company that builds tools and platforms to support churches, ministries, and faith-based organizations. Its main goal is to help these groups connect better with people, grow their communities, and use new technologies like AI in ways that align with their values.

For now, Gloo offers a digital workspace for ministry leaders to organize content, communication, and outreach efforts, as well as AI-powered tools to enable churches to better engage with their members and reach new people. In addition, Gloo works to connect faith organizations and distribute content from Christian publishers and media to churches and individuals.

"Now more than ever, there is great need for faith-based communities to take an active role in ensuring we shape technology as a force for good," Gelsinger wrote. "As we have seen with social media, the impact of technology evolutions is swift, deep and long lasting. AI is an even more powerful yet nascent tool. It is imperative we ensure AI is used to enhance the human experience, not harm it."

Former Intel CEO Craig Barrett said that Intel should not divide its business into two pieces, especially as it just had a technological breakthrough that would allow it to catch up with TSMC’s N2 process node. Barrett said this in his opinion piece on Fortune, in response to the suggestion of a few former Intel directors that championed dividing the chip giant instead of letting TSMC take it over.

Barrett said that the reason why Intel’s foundry business failed in the past years is because it lacked the technology to compete against the Taiwanese chipmaker, not because customers won’t trust Intel since it also makes and sells chips. But now that it’s seeing success with its 18A process technology, he argues that splitting off the foundry will only serve as a distraction and introduce complications. Instead, Intel should focus all its efforts on the 18A node, ensuring that it delivers “good customer service, fair pricing, guaranteed capacity, and a clear separation of chip designers from their foundry customers” alongside this advanced technology.

Aside from speaking up against the notion of splitting up Intel, the former CEO also criticized Intel’s former and current board. He said that the Intel board “bears ultimate responsibility for what has happened to Intel over the last decade” while saying that the next CEO to take the company’s reins should build on Pat Gelsinger’s accomplishments. The former CEO also took a swipe at the four former Intel board members. Barrett said that although they mean well, they were academics and former government bureaucrats who weren’t familiar with the complex workings of running a semiconductor business.

Pat Gelsinger, who was ousted as CEO of the company just last December, was one of the key people who led Intel to achieve its recent technological breakthroughs that might put it on par with TSMC. Developing and setting up production for new chip technologies takes years, something that Gelsinger pushed under his watch. In the end, it seems that Craig Barrett thinks that forcing Pat Gelsinger to retire was the wrong move for intel. He says, “In my opinion, a far better move might be to fire the Intel board and rehire Pat Gelsinger to finish the job he has aptly handled over the past few years.”

Being key players in the PC market, Intel and Microsoft have always worked closely as one developed PC hardware, and the other delivered PC software. Thus, we saw the long-running dominance of 'Wintel' PC systems. Despite this success, both Intel and Microsoft missed the smartphone revolution in the late 2000s – early 2010s. But while Microsoft has managed to recover, Intel is struggling. Bill Gates, a co-founder of Microsoft, admitted in an interview with the Associated Press that Intel had lost its way, and it would be tough to resurrect.

Gates is particularly shocked that Intel, once known for being at the forefront of innovation, has fallen behind in both chip design and manufacturing. Competitors like Nvidia and Qualcomm lead in AI and smartphone processors, whereas TSMC is ahead in terms of process technologies. These issues, combined with the high costs of modern semiconductor development and production, put Intel in a difficult position. Now, with the recent ousting of CEO Pat Gelsinger in December, concerns about the company's ability to survive have intensified.

"I am stunned that Intel basically lost its way," Gates told the Associated Press. "Gordon Moore always kept Intel at the state of the art. And now they are kind of behind in terms of chip design and they are kind of behind in chip fabrication. […] I thought Pat Gelsinger was very brave to say, 'No, I am going to fix the design side, I am going to fix the fab side.' I was hoping for his sake, for the country's sake that he would be successful. I hope Intel recovers, but it looks pretty tough for them at this stage."

While both Intel and Microsoft missed the start of the smartphone megatrend some 15 – 18 years ago, both companies took advantage of the cloud computing rise in mid-2010s, which was another industry megatrend. However, the situation was a bit different with 5G and AI megatrends. While Intel rested on its laurels and then missed the entire rise of AI both in terms of hardware and in terms of investment in Open AI and other startups, Microsoft became one of the leaders of the artificial intelligence world. While Intel sells processors for 5G base stations, it did not benefit from the transition to 5G as significantly as other market players.

Having missed two out of three industry megatrends and having lost its leadership in semiconductor manufacturing, Intel will have to find its way to recover. Last year the company began to cut its costs and fired some 15,000 employees. While Intel can hardly go bankrupt considering that it owns some of the best semiconductor production facilities in the industry and sells the lion's share of CPUs for PCs and datacenters, how exactly the company's next chief executive will navigate the blue giant is something that remains to be seen.

DeepSeek, a China-based startup, unveiled an AI assistant last week that is 20 to 50 times cheaper to train and operate than OpenAI's models. This triggered a massive selloff of tech stocks that had been driven by the rise of AI. The selloff wiped nearly $600 billion from Nvidia’s market value as investors believed that demand for its processors would decrease. However, ex-Intel CEO Pat Gelsinger argues that compute performance is never enough and that high demand for processors from tech giants will remain.

The reaction to DeepSeek's breakthrough has overlooked three critical lessons from five decades of computing, according to Gelsinger's post over at LinkedIn. First, lowering the cost of computing resources expands the market, not contracts it. Just as cheaper technologies like PCs and mobile devices drove explosive growth, making AI more affordable will integrate it into more applications and will trigger broader adoption.

"The market reaction is wrong, lowering the cost of AI will expand the market," Gelsinger wrote. "Today I am an Nvidia and AI stock buyer and happy to benefit from lower prices."

Second, engineering thrives under constraints, Gelsinger notes. DeepSeek’s team faced export restrictions and limited resources but created a world-class solution at a fraction of the usual cost. This ingenuity resonates with insights from computer science pioneers, who often state that they achieved their best work under significant limitations.

Third, openness fosters innovation, Gelsinger contends. The shift toward proprietary AI models stifles transparency and collaboration. Open ecosystems, as proven by Linux, Wi-Fi, and USB, consistently lead to better outcomes by encouraging scrutiny, ethical introspection, and broader adoption. DeepSeek’s open approach offers a much-needed reminder of the importance of shared innovation in AI.

“Open wins every time it is given a proper shot,” Gelsinger wrote. “AI is much too important for our future to allow a closed ecosystem to ever emerge as the one and only in this space.”

Gelsinger is not alone in his assessment that the market reaction is wrong; other market observers believe that the reaction was exaggerated. AMD, Broadcom, Intel, and Nvidia remain essential for building AI data centers and training large AI models.

"The real money in AI is providing the chips for the data centers from the likes of Nvidia, AMD, and Broadcom," Daniel Morgan, senior portfolio manager at Synovus Trust Company, told Reuters. "Overall, I view the AI tech selloff today as an opportunity to add high-quality tech shares on weakness."

DeepSeek’s model can be used locally on PCs and even smartphones, which is its fundamental advantage over ChatGPT's o1 and o4 models that reside on the cloud. However, training the model still requires advanced data center-grade hardware. Although DeepSeek reduces requirements for training hardware, companies like Anthropic and OpenAI could increase the number of parameters for their models while still consuming their vast computing resources.

To that end, demand for advanced processors in large-scale computing environments is expected to persist. Also, it is unclear how much resources — both computational and financial — DeepSeek consumed while prepping to train its model and developing all the optimizations to reduce requirements for the training cluster. Thus, the implications of DeepSeek’s breakthrough on the hardware market remain to be determined. 

As a result, experts suggest that the selloff could present a buying opportunity for long-term investors in tech stocks like AMD, Broadcom, Intel, and Nvidia.

Having joined Intel at a tough time and doing his best to revive the company before retiring, Pat Gelsinger is yet to see the fruits of his decisions as the chief executive of Intel. However, based on his claims, the 18A process technology — the pinnacle of his five nodes in four years plan — is a success. Being ousted by the board, Gelsinger now has more time to respond to messages on X, which adds some color to what's happening with Intel's node development.

Pat Gelsinger responded to Patrick Moorhead's post claiming that a rebuffed story about Broadcom being disappointed with Intel's 18A due to low yield was 'fake news.' The original story emerged in early September, right after Intel's then-CEO Pat Gelsinger disclosed the defect density (D0) of 18A, which back then was 0.4 def/cm^2.

"I am so very proud of the TD/18A team for the incredible work and progress they are making," Gelsinger wrote in an X post.

Given that 18A was several quarters away from mass production at that time, such a defect density was good enough, though worse than that of TSMC. For instance, the defect density of TSMC's N7 and N5 fabrication processes was about 0.33 def/cm2 three quarters before mass production, which was the same point where Intel's 18A was in early September.

It is commonly believed that a defect density below 0.5 defects per square centimeter is good (0.5 def/cm^2), though when it comes to the yield of actual chips, everything depends on the size of the die.

Broadcom is known for its gigantic system-in-packages for AI with compute chiplets close to the size of a reticle, which in the case of EUV lithography tools is 858 mm^2. Let's assume we are dealing with 800 mm^2 dies, which is the size of one Nvidia's Blackwell GPU chiplet (there are two chiplets per B100/B200 processor). In this example, there are 59 - 65 die candidates on a 300-mm wafer (assuming that we are dealing with a hypothetical 23 ´ 34.8 mm die), depending on various parameters. With a defect density of 0.4 def/cm^2, that gives us five perfect dies per wafer at a yield of around 9%. In the case of a defect density of 0.2 def/cm^2, we are already talking about 15 perfect dies and a yield of 24.9%.

There are several catches to be aware of in such a calculation. First, both Broadcom and Nvidia implement huge redundancies in their designs, so even with a relatively high defect density, they can get enough sellable die to justify the production of a 300-mm wafer using an advanced node. Depending on the client and contract, this might be at $20,000 per wafer, which means that their actual yield is well above the one we got from a publicly available yield calculator.

Secondly, not all processors are large. For example, Apple's A18 Pro system-on-chip for iPhone 16 Pro smartphones is 105 mm^2, and this is a very big processor for consumer devices. 105 mm^2 (let's assume it is an 11´9 mm design) gives us 625 die candidates per 300-mm wafer, and at a defect density of 0.4 def/cm^2, it gives us 587 perfectly yielded dies at a 68.2% yield. Again, Apple probably implements loads of redundancies into its designs, so the actual yield of sellable chips is higher.

In general, Intel says its 18A process technology shows promising defect density figures of 0.4 defects per square centimeter for now. While this density is slightly higher than TSMC's benchmarks at comparable stages of development, it is within industry standards for advanced nodes and sufficient for generating usable yields depending on die size and design redundancies. Larger dies, like Broadcom's and Nvidia's AI chiplets, face more significant yield challenges, but advanced redundancy techniques should probably mitigate these issues, enabling a viable number of sellable chips. Meanwhile, smaller processors, such as Apple's A18 Pro, achieve significantly higher yields even at the same defect density.

Two days ago, the industry was taken aback by Pat Gelsinger's surprise resignation - suddenly deciding to step down as the CEO of Intel and likewise exiting the board of directors. With two co-CEOs working as ad-hoc replacements, Team Blue's executive structure is in dire straits as it looks for a suitable successor to Gelsinger. Through publicly available 8-K Forms and a guesstimate from Reuters, Patrick Gelsinger has reportedly left Intel with a severance package worth $12 million - further exacerbated by his large stake in Intel.

Traditionally, CEOs announce their resignations months before the fact and nominate a suitable successor. In light of rumors - so much so that you can practically smell them in the air - there is speculation that Pat was likely shown the door at a request by displeased board members. Gelsinger spearheaded a struggling Intel under his IBM 2.0 strategy as Chipzilla is now nearing its 5N4Y (five nodes in four years) promise with 18A around the corner. Intel refused to provide further clarification, but this corporate debacle casts doubt over its great ambitions in Intel Foundry, DCAI (Data Center and Artificial Intelligence), and AXG (Accelerated Computing Systems and Graphics) segments - to name a few.

Per the filing, payday is knocking on the door early for Gelsinger as he is set to enjoy a lavish golden handshake. The package includes a severance pay equal to 18 months of service as CEO totaling $1.875 million ($1.25 million for 12 months) backed by 1.5x of Gelsinger's current target bonus - which itself is 275% of his base salary - netting us $5.15 million - payable throughout 18-months. Lastly, pro-rata payments equivalent to 11 months (out of 12) of the annual bonus should total almost $12 million per Reuters.

The industry is naming Lip-Bu Tan as a suitable successor, though it could take a while before candidates are shortlisted and selected for onboarding. Intel's repeated financial failures might have potentially created a rift between Gelsinger and shareholders. Earnings have been poor because bleeding-edge foundries aren't cheap to run and finance—especially when external consumer demand is almost non-existent to compensate for these high costs.

Still, the aftermath of this decision will materialize in the coming weeks or months. The CHIPS Act, in a way, restricts Intel from spinning off its foundry division since it must own at least 50.1% of Intel Foundry. Hence, it remains to be seen which division will be the first on the chopping block—or maybe none at all—who knows?

Intel announced that CEO Pat Gelsinger will retire and step down from the board of directors, effective immediately. Intel has appointed two interim leaders, CFO David Zinsner and Michelle Johnston Holthaus, as interim co-CEOs while the board begins a search for a new CEO. Speculation is rife that Gelsinger was forced out, especially in light of the company's poor performance in the stock market — Intel's stock price is down 61% since Gelsinger took over.

Gelsinger spent more than 40 years at Intel, returning in 2021 to lead the company after serving as the CEO of VMware. Intel's press release doesn't indicate Gelsinger's future plans. There have been many reports that Intel's board of directors is exploring a plan to split the company and spin off the foundry business. The press release says the board wishes to put the product group at the center of 'all we do,' which might indicate more restructuring. However, the company also said, "Returning to process leadership is central to product leadership, and we will remain focused on that mission."

Gelsinger presided over a tumultuous four years at Intel as the company struggled to regain its lost glory, both with its process node technology and finished products business. The company has recently undergone a series of extreme cost-cutting measures as it struggles to return to profitability, culminating in a restructuring and mass layoff of more than 15% of its workforce that will be concluded by the end of the year. Intel is still in the midst of laying off roughly 15,000 employees or more (potentially up to 17,475 based on recent Intel headcount numbers of 116,500). This ranks as the most severe layoff in Intel's 56-year history.

Gelsinger launched an audacious plan to turn around the struggling chipmaker, with plans to transform the company from a chipmaker that produces its own chips to a third-party foundry that produces processors for external customers. Those efforts have seen some success as the company embarked on its IDM 2.0 strategy. However, building an external foundry is a long-term process that requires intense capital investments that won't pay off for years — a strategy that the stock market often dislikes. 

Intel's product division continued to have multiple setbacks under Gelsinger's tenure, with numerous product delays that continued to hamper the company's competitiveness as AMD began to take more market share and Arm chips began to chew into Intel's high-margin data center CPU business. Meanwhile, Intel has missed the AI wave almost entirely. It recently disclosed that its Gaudi 3 accelerators aren't selling well, instead pinning hopes on the next-gen products as its entry into the AI market. 

Gelsinger did at least staunch the bleeding on the manufacturing side of the business as he launched a plan to deliver five nodes in four years to help rapidly regain its footing against rival fab TSMC. That roadmap remains largely intact, but the company's fortunes have now fallen almost entirely to the success of its yet-to-be-delivered 18A node. However, initial signs are good that this node will be successful, and the company recently released its PDK 1.0, which will allow external chipmakers to design chips using the node.

CFO David Zinsner and Michelle Johnston Holthaus will serve as co-CEOs while the board searches for a new CEO. Holthaus has long been the executive vice president and general manager of the company's Client Computing Group (CCG). She will now serve as co-CEO and the head of a newly-defined CEO of Intel Products role that includes CCG, the Data Center and AI Group (DCAI), and the Network and Edge Group (NEX). Frank Yeary, independent chair of the board of Intel, will serve as the interim executive chair during the transition. Perhaps in a sign that the company's process node roadmap remains intact, the Intel Foundry leadership structure will not be changed. 

Gelsinger said, “Leading Intel has been the honor of my lifetime – this group of people is among the best and the brightest in the business, and I’m honored to call each and every one a colleague. Today is, of course, bittersweet as this company has been my life for the bulk of my working career. I can look back with pride at all that we have accomplished together. It has been a challenging year for all of us as we have made tough but necessary decisions to position Intel for the current market dynamics. I am forever grateful for the many colleagues around the world who I have worked with as part of the Intel family.”

It remains unclear if Gelsinger is leaving due to being forced out or if his exit was precipitated by other personal factors. The language in the Intel press release indicates a quasi-restructuring with more focus on the product division, implying this is part of a change of plans at the chipmaker. Notably, Intel recently announced its succession plan for its top scientist and head of process technology development, Ann Kelleher, which some have taken as a sign of troubles with the Foundry roadmap. We'll update as soon as we learn more. 

Pat Gelsinger, the CEO of embattled tech company Intel, praised the xAI team after visiting Elon Musk’s Memphis Supercluster. He posted on X (formerly Twitter) that xAI uses Intel Xeon processors for its AI head node — the dedicated server that manages the entire 100,000-GPU-strong cluster — and that it’s “incredible what’s been built in such a short amount of time!”

After losing over $1.6 billion in its data center and foundry businesses, Intel is struggling. It has also missed the AI bandwagon, especially as its Gaudi 3 AI accelerator still suffers from issues.

On the flip side, Elon Musk has so far spent around $10 billion on AI training hardware this year, allowing his team to set up 100,000 Nvidia H200 GPUs in just 19 days — a process that usually takes four years, according to Nvidia CEO Jensen Huang. Although Nvidia powers Elon’s AI processors, he still needs a CPU to direct the AI cluster’s massive processing power. Pat Gelsinger’s post confirms that the xAI team chose Intel Xeon processors to drive their AI head node. Team Blue launched its latest 128-core flagship CPU called Granite Rapids in September 2024, but Gelsinger did not confirm which model the team uses.

The Intel CEO also praised Michael Dell, the founder and CEO of Dell Technologies and the current provider of xAI’s head node servers — at least those pictured here. Musk previously purchased systems from Supermicro, but it's unclear if the Dell servers are used in place of other Supermicro offerings — it is entirely possible that the company chose to use Dell head nodes while continuing to outfit the rest of the data center with Supermicro gear. The use of Dell head nodes will further rumors that Supermicro's legal issues have pushed xAI to switch suppliers, but that might not be the case.

Aside from exploring xAI’s massive AI cluster, we don’t know if Pat Gelsinger had other reasons for visiting the Memphis data center. Musk plans to double the GPUs on the site to 200,000 shortly, and he even mentioned plans to go as high as 300,000, although it seems that it will be a later phase of expansion. All these additional GPUs will still reportedly be Nvidia AI accelerators and could be Blackwell GPUs, so it’s unlikely that Pat is selling Elon some of Intel’s Gaudi 3 chips.

However, such a massive GPU purchase means that xAI would also need many CPUs, so he might try staying in Musk’s good graces to sell more Xeon chips. After all, even though xAI isn’t buying Intel’s AI chips yet, it still would do the company well if it could move its data center CPUs, helping it recover from its financial troubles revealed in August this year.

Intel CEO Pat Gelsinger is frustrated with the U.S. government’s slow progress in providing his company with its promised CHIPS Act funding. The New York Times shared recent interviews with Gelsinger and U.S. Secretary of Commerce Gina Raimondo about the CHIPS and Science Act.

The Biden-backed CHIPS Act represents $280 billion of funding for semiconductor manufacturing in the United States, giving the Commerce Dept. the ability to provide 10-figure grants and loans to companies like TSMC and Intel to supercharge a young U.S.-based chip industry. The Biden administration has promised Intel $8.5 billion in direct funding to build its new chipmaking fabs (plus $11 billion in loans and a 25% investment tax credit of up to $100 billion). Still, the company has not seen any of these funds so far.

Missing the funds is a problem for Intel, which is in turmoil due to $1.6 billion in losses in Q2 2024. Intel is cutting 15% of its workforce, representing 15,000 or more workers worldwide. Gelsinger has spent the past three months since the disastrous August earnings call restructuring his company and placating stockholders. He has become “frustrated” with the roadblocks the government has put in between Intel and its CHIPS Act funds.

“My simple message is, ‘Let’s get it finished,’” said Gelsinger in an interview. “There’s been renegotiations on both sides.” The U.S. government put some objectives between CHIPS Act recipients and their money, with milestones including completing building projects, securing customers, etc. “Obviously, with elections, you know, nigh in front of us, hey, we want this done,” said Gelsinger, with the possibility of a new presidential regime lighting a fire of urgency.

This reticence to give out CHIPS Act funding right away apparently stemmed from fears from the government that Intel specifically would not meet its promises. “[There is fear that] Intel is going to take chips money, build an empty shell of a factory and then never actually open it, because they don’t have customers,” said former Commerce Department official Caitlin Legacki.

Gelsinger’s tenure as CEO since 2021 has been marked by a desire to rebuild the company in a foundry-forward direction. One of the major forces behind lobbying for the CHIPS Act, Gelsinger also supercharged the Intel Foundry division, which, despite its extremely high costs, has been deemed crucial for Intel's long-term success. The foundry is set to be spun off into an independent subsidiary, with its overseas operations paused for the next two years while its U.S. facilities are prioritized.

According to reports from last month, Intel is set to receive its first round of CHIPS Act funds before the end of 2024. Gelsinger, as mentioned above, is anxious to receive funds before the election, and Qualcomm is reportedly waiting until the election to make a move on purchasing Intel assets.

Earlier this week it was revealed that Intel’s CEO Pat Gelsinger earned a big rise in compensation in 2023. However, the extra millions mean Gelsinger is still only receiving approximately half the total compensation AMD CEO Lisa Su receives, reports MarketWatch. We don’t have the final 2023 figures for Nvidia’s Jensen Huang yet, but impressive stock gains have already propelled the leader of the green team into becoming the world's 21st richest person.

Gelsinger’s compensation details came from Intel’s 2024 proxy statement, which came out on Thursday. The financial documents showed the Intel CEO enjoyed a 45% rise in total compensation from $11.61 million in 2022, to $16.86 million in 2023.

Overall, this seems fair if we look at Intel's stock performance over the same period. During 2023 Intel stock gained over 90% in value. But 2022 wasn’t such a good year, with Intel stock dropping nearly 20%, and Gelsinger’s compensation fell a similar amount compared to the previous year.

AMD also released a proxy statement last week. According to the statement, the CEO, Dr Lisa Su, received $30.35 million in total compensation in 2023. This amounts to basically the same as her 2022 compensation. However, it remains about 80% ahead of the Intel CEO’s annual compensation.

Stock makes a big difference

All the total compensation figures we have highlighted include a mix of a base salary, stock awards and options, plus other bonuses and incentives. Both the above CEO total compensation figures are boosted significantly by stock awards. For example, Gelsinger’s 2023 salary was ‘just’ $1.07 million, but he earned $12.43 million in stock awards. Meanwhile, Su’s 2023 salary was $1.2 million, but she got $27.69 in stock and options, among other bonuses and incentives.

The (green) elephant in the room

By now you might be wondering about how Jensen Huang has fared in terms of his total compensation for 2023. Sadly, the full figures for the last fiscal year haven’t yet been published by Nvidia. 

We know that the year previously, Huang’s total compensation was $21.36 million, and we know Nvidia stock went up an amazing 239% over the course of last year. In brief, Huang probably had a decent total compensation uplift in 2023, we are just waiting on the official figures for full and confirmed details.

Intel CEO Pat Gelsinger has publicly invited Tesla CEO Elon Musk to tour his firm's semiconductor fab lines. In a post on the Twitter/X social media platform, Gelsinger said he was thinking of Musk when he was awarded the $8.5 billion in CHIPS Act funding, earlier in the week. Gelsinger has also been courting Musk's arch-foe OpenAI / Sam Altman. It is safe to say that the Intel CEO is trying to get an early start in filling the Intel Foundry Services (IFS) order books, now that the financial fuse has been lit.

In Gelsinger's post, embedded above, you can see the Intel CEO reach out personally to Elon Musk, promising him a tour of Intel's high-tech manufacturing lines. Musk didn't respond publicly, yet, but this may be because Gelsinger also asked him to "follow me," so the pair could chat privately via direct messaging (DM).

Musk would surely be an excellent catch for IFS. This superrich entrepreneur has fingers in many tech pies that are highly reliant on processors, lots of state-of-the-art processors. Musk's firms buy AI accelerators from both AMD and Nvidia, for tasks like machine learning, computer vision, self-driving, Grok, and more, but the firm is also developing its own Dojo ASICs (Application-Specific Integrated-Circuits) with new generations in development.

Looking back at other recent Tom's Hardware headlines, we can see Gelsinger has been very actively touting for business in recent weeks. We know the Intel CEO will have been talking to OpenAI's Sam Altman recently. Altman has floated the ambitious $7 trillion idea of OpenAI building its own fabs to make custom AI chips. However, Altman was at the last Intel Foundry event and surely will have mulled over the possibilities of using Intel's upcoming manufacturing capacity, and expertise. Also, last month, Gelsinger reiterated that Intel is willing to build chips for anyone, including long-time rival AMD.

On Wednesday, Intel's funding dreams came true as it came to a preliminary agreement with the U.S. Commerce Department. The iconic PC chipmaker will get $8.5 billion in direct funding for U.S. projects, plus $11 billion in low-interest loans and a 25% investment tax credit on up to $100 billion of investment. This is great news for Intel's domestic chipmaking plans covering projects in Arizona, New Mexico, Ohio, and Oregon. Perhaps delayed building projects such as the Ohio fab will move forward more swiftly, with fresh funding behind their sails.

Intel CEO Pat Gelsinger held a question and answer session here today at the company's IFS Direct Connect 2024 event, and in response to a question from Tom's Hardware, he reiterated that Intel is willing to build chips for anyone -- including long-time rival AMD.

Intel Foundry will not only build chips for external customers using Intel's crown jewel process nodes, but also the full complement of all of its IP, including its leading-edge packaging technology. That raises the question of how the company would deal with competitors that are armed with its very own technology - and perhaps beating Intel's own internal product teams with better processor designs. While Gelsinger didn't answer my entire question, he certainly gave us plenty to ponder.

"Intel will now offer its process nodes to some of its competitors, and there may be situations wherein your product teams are competing directly with competitors that are enabled by your crown jewels," I asked. "How do you plan to navigate those types of situations and maybe soothe ruffled feathers on your product teams?"

"Well, if you go back to the picture I showed today, Paul, there are Intel products and Intel foundry, There's a clean line between those, and as I said on the last earnings call, we'll have a setup separate legal entity for Intel foundry this year, " Gelsinger responded."We'll start posting separate financials associated with that going forward. And the foundry team's objective is simple: Fill. The. Fabs. Deliver to the broadest set of customers on the planet."

"We hope that that includes Jensen (Nvidia), Christiano (Qualcomm), and Sundar (Google), and you heard today it includes Satya (Microsoft), and I even hope that includes Lisa (AMD) going forward. I mean, we want to be the foundry for the world, and if we're going to be the Western foundry at scale, we can't be discriminating about who’s participating in that. So, unequivocally, it is to be the foundry for the world. Commit supply chains, your leadership technology - the doors to the ala carte menu are wide open for the industry."

"And some of those [garbled] that we build, like Clearwater Forest that I showed today, hey, that's a construct that was innovated by my Xeon team: How to do hybrid bonding, Intel 3 base die, Intel 18A top die, being able to solve a lot of the CoWoS/Foveros problems using EMIB and hybrid bonding. That will become a set of collaterals that will benefit the foundry team. They're going to go sell that constructional opportunity as a better way to build AI chips. So clearly, I'm taking product group intellectual property and leveraging it on the foundry side of the business."

While this may seem to be counterintuitive, it isn't entirely unexpected: Intel is opening its doors to the industry at large with the goal of being 'the world's foundry,' and Gelsinger has previously stated his desire to work with everyone in the industry and named names. 

There were other signs of cats and dogs living together at the Intel Foundry event, too: Intel Foundry head Stu Pann called long-time rival Arm the company's most important customer, and then invited Arm CEO Rene Haas to the stage for a joint presentation. We certainly couldn't have seen that coming five years ago. In fact, Intel is already working on fabbing Arm Neoverse processors. 

In case you thought Gelsinger wasn't being clear, he doubled down on the statement in a later answer, saying, "So I want my foundry to be used by everybody. Period. We want to help build Nvidia chips, and AMD chips, and TPU chips for Google, and inference chips for Amazon. Period. We want to help them and give them the most powerful, performant, and efficient technologies for them to build their systems. Period. Full stop."

Gelsinger outlined the rest of his rationale in his extended response to my question.

"I also expect some customers are going to say hey, I really liked some of those Intel products, but I want it with a different chiplet that I do. And we're gonna say yes to that. Great. Let's go build unique versions of Clearwater Forest, and we’ll put your security chip on it or some other IO chip or networking component as well. We definitely see both complementing each other and we're gonna have soft, hard, and chiplet-based IP that we’ll produce that'll be available for our foundry customers as well going forward. But ultimately, we have to build and earn the trust of the foundry customer. And for that, it'll be the best of Intel's available to them, and their intellectual property and supply chains will be protected and contractually committed to," Gelsinger said. 

Gelsinger's desire to serve all customers comes as the company appears to be on track to regain its process node leadership over TSMC next year. With the goal of five nodes in four years nearly completed, the new Intel certainly doesn't look much like the old Intel that floundered for several years through its missteps on the 10nm node, ultimately losing its crown to TSMC. 

Current Intel CEO Pat Gelsinger has a long and storied history at the company and was one of the key design engineers behind developing the iconic 386 processor. At the tender age of 24, perhaps Gelsinger thought his work would not be remembered or receive due credit, as it has been revealed the young engineer etched his initials into the very design of the 386 silicon die in two places, indelibly securing his place in history.

Computer History buff Ken Shirriff recently published a retrospective on the Intel 386 processor, and to draw attention to his latest blog about 386 reverse engineering and architectural investigations, he shared a Twitter / X thread. One of his eye-opening observations was that Gelsinger’s initials could be found etched on two areas of the 386 silicon.

Etching initials and/or artwork into silicon dies is a common tactic for chip designers, but this is the first mention of a design, or in this case, initials, being discovered on the iconic 386 processor. 

Please click 'see more' to expand the Tweet images.

The Intel 386 processor, introduced to the masses in 1986, was a hugely important product for Intel. Originally called the 80386 before being renamed the i386, this processor was the firm’s first 32-bit PC processor. Gelsinger recalls that offering a 32-bit PC processor didn’t lead to immediate accolades, far from it. “They derided us for being extravagant,” he recalled in a Computerworld interview, published in 2008.

The chip had 275,000 transistors, quite the feat for the time, but that's rather paltry compared to today's chips that come with up to 80 billion transistors, or more, per die. The 386 was fabbed on the 1.5 uM node (equivalent to 1500 nanometers), while today's chips have reached 3nm, and future variants will shrink to 1.4nm — and shrink even further as we move into the Angstrom era. 

Gelsinger went on to co-author his first book about programming the 386 microprocessor, published in 1987. He was also the lead architect on the 486 processor, which was introduced in 1989. It is claimed that Andy Grove offered Gelsinger the lead architect role on the 486 to keep him from quitting the company. Meanwhile, the 386 had a lengthy run, with production of the processor continuing until September 2007.

Perhaps this longevity is one of the reasons that the Intel 386 CPU has garnered so much attention from Shirriff. The computer history buff reckons that it is “an important milestone,” and highlighted that there are “two interesting and completely different circuits that the 386 uses to implement an XOR gate.” Check out his top-linked blog and social media postings to read more in-depth insights into the 386 processor architecture.

Bringing you up to date, Mr Gelsinger is steering Intel through a rapidly changing and highly competitive time in the IT industry. The firm recently launched its ground-breaking codename Meteor Lake, or Core Ultra series, processors, heralding the dawn of AI PCs. 

Intel CEO Pat Gelsinger spoke at the Aspen Security Forum 2023 in July; The topic under the spotlight was that of semiconductors and national security, and the issues that have arisen from the passing of the CHIPS Act. One of Gelsinger’s most eyebrow-raising assertions was that Intel deserves a bigger slice of the $52 billion US CHIPS Act pie than foreign rivals TSMC and Samsung. It was a bold claim, and he put forward a convincing case in what could be a high-stakes / high-reward gambit (h/t to EETimes).

Security, and China export controls particularly, is a thorny topic for successful global semiconductor businesses with their roots in the US. As US sanctions on China tighten, business becomes more difficult for the likes of Intel (and Nvidia, Qualcomm and AMD). Last month we reported on US semiconductor industry bosses having negotiations with senior US government economics and national security figures.

At Aspen, Gelsinger put forward the case for Intel to face fewer restrictions from trade regulation and get a larger portion of the US CHIPS Act cash. His multi-pronged argument appeared designed to hammer home the following points:

First, China represents 25% to 30% of Intel’s market, and the company's current $30 billion US expansion plans were partly put in place to address this demand, according to Gelsinger. If trade restrictions tighten and further cut this geographic revenue stream, Intel may not want to continue making significant investments in US projects, which have been touted to be good for US jobs, the US economy, and even US national security. Overall, the point was that China export controls unfairly target Intel business -- and that's bad for the US.

Second, Gelsinger described the current set of trade restrictions as excessive and badly targeted. “Today we have over 1,000 companies on the Entity List, many of which have nothing to do with national security, and nothing to do with security concerns in China,” noted the Intel CEO. So, in essence, Gelsinger was arguing for a loosening of the restrictions now in place, to refocus tightly on areas of undeniable national security.

Finally, and probably most controversially, Gelsinger made his case that Intel should get a bigger slice of the US CHIPS Act's $52 billion pie. The Intel CEO’s argument was quite clear and reasoned. He said the US should celebrate the fact that TSMC and Samsung were investing in building in the US, but there is a glaring difference in their operations and Intel’s. “All of my essential R&D is done here. Most of their work is done overseas,” Gelsinger underlined. “We should benefit more.”

If you care to watch the video embedded above, you can see Gelsinger underline the necessity for the CHIPS Act, and provide some of the history leading up to its passing. Moreover, you can listen to him make Intel's key arguments for loosening the current trade restrictions, while being more generous to Intel - and his reasoning.

As well as the interviewer Steve Clemons, an editor at Semafor, you will see Penny Pritzker, the US Commerce Secretary, sitting alongside Pat Gelsinger. As a representative of US government, Pritzker discussed the Fed's thinking and strategy. For the US to reinvigorate the semiconductor industry, it isn’t all about throwing money at chipmakers. For example, there is the widening chasm in skilled worker requirements compared to actual labor availability.

Nvidia's Vice-president and General Manager of HPC-geared DGX systems has come forward to set the record state on where exactly the company's GPU volume issues lie. According to Boyle, the problem doesn't come from Nvidia miscalculating demand or wafer yield issues at its manufacturing partner, TSMC. 

Instead, the bottleneck in manufacturing enough GPUs that can cater to both consumer and professional workloads (looking at you, AI boom) lies with the chip packaging steps that come after. Nvidia's H-class GPUs make use of TSMC's 2.5D Chip-on-Wafer-on-Substrate (CoWoS) packaging technology, a multi-step, high-precision engineering step whose complexity slows down the number of GPUs that can be assembled in a given timeframe. This can disproportionately impact supply; the delta between the number of GPUs required and those available even led Elon Musk to say they were proving "harder to acquire than drugs." We couldn't check that here at Tom's Hardware, but we'll trust Mr. Musk to know that one after Twitter/X procured as many as 10,000 of Nvidia's compute-focused GPUs.

Multiple steps are required, from chip design through manufacturing, before a chip becomes a usable GPU. For one, issues during the chip design stage could create a manufacturing bottleneck due to design oversights that bring a design's yield down (yield being the percentage of usable chips out of an entirely-etched wafer). A lack of rare earth metals or other materials, such as the recently-restricted Gallium, would impact other steps in the long logistics chain; so would materials contamination, energy blackouts, and many other factors, as we've already seen happen throughout the years.

But this CoWoS bottleneck issue may be more severe than expected. TSMC itself has said that it expects it to take 1.5 years (and the completion of additional fabs and expansion of already-existing facilities) to bring the packaging process backlog back in line. This likely means that Nvidia will have to decide on what packaging capacity to allocate to which products - there's not enough time and capacity to package them all.

The supply issues may come from TSMC's packaging, but in the end, Nvidia dominates the AI space through its (according to Pat Gelsinger) "incredible execution." TSMC, for its part, is one of the few players with a functional, high-performance packaging technology that's an absolute requirement for performance scaling. There's definitely a need for more competition in the AI space (and in a good but insufficient sign, AMD gaming GPUs such as the RX 7900 XTX have also been seen heading towards AI datacenters). 

But competition's also needed on the manufacturing side of the equation. There's hope that Intel's Foundry Services (IFS) will bring another player into the high-performance GPU game; at the same time, eyes are also on Samsung to at least close its manufacturing tech gap relative to TSMC such that its chips are attractive enough for another manufacturer to be on the table.

Having experienced two consecutive quarterly losses, Intel bounced back to profitability in the second quarter and is looking positively toward the second half of the year. Intel CEO Pat Gelsinger expressed optimism about the company's future in a conversation with Yahoo Finance Live, stating that the worst is likely over for the PC market, and the upward revision of the Q3 guide indicates a brighter future. Meanwhile, Gelsinger expects the upcoming Meteor Lake CPU family to be Intel's new 'Centrino Moment.'

"I do think we have […] seen the worst," Gelsinger said. "Obviously, the PC inventory levels are now healthy again. And we are seeing the demand signals. You know, we think we still have a little bit of inventory on the networking and the datacenter to fight through in the third quarter of the year. But I really think the worst is behind us at this point." 

The head of Intel attributed his positive outlook to expected improvements in the PC business, noting that Intel's inventory levels are now healthy, which is why the chip giant now expects quarter-on-quarter improvements due to inventory level adjustments.

Gelsinger also highlighted the upcoming introduction of Intel's codenamed Meteor Lake processor, the company's first client CPU to use a multi-chiplet design and a built-in AI accelerator to boost applications like real-time language translation, transcription, and video effects, among other things. 

Interestingly, Gelsinger sees AI accelerator integration as the company's new Centrino moment. Way back in 2003, Intel was the only company to offer a fully integrated PC platform with Wi-Fi and an appropriate software stack. By contrast, AMD and Apple today have processors with integrated AI accelerators and while software support for AMD's unit may be scarce, Apple's Neural Engine AI capabilities are used by its own software. 

"We see that being like the Centrino moment for bringing Wi-Fi into the PC two decades ago," said Gelsinger. "We see this AI PC as ushering in a new class of applications, major application upgrades, and ISV excitements. We are leading the way with our Meteor Lake product in the second half of this year. So healthy and great opportunity in the future."

Gelsinger also addressed Intel's position in the datacenter AI market, acknowledging that the company has not been as proactive as it should have been. He recognized Nvidia as a strong competitor that has led the way in this space and currently dominates the arena. Yet, he mentioned that Intel has a robust roadmap for its Gaudi product line, which is gaining market interest. As it turns out, the company already has Gaudi 3 in the lab, which is twice as fast as Gaudi 2.

"Our Gaudi product line really starting to get interest in the marketplace, customer pipeline is a building very rapidly, and we have a very robust roadmap," said Gelsinger. "Gaudi 2 is shipping in volume today. Gaudi 3, I just received the first silicone it. So it is sort of like a 2x level of capability. And, you know, we will be launching [Gaudi 3] for volume shipments next year. And then our 2025 product is already well underway."

He expressed confidence that the company will receive more credit for its AI efforts as they continue to execute its plans. Yet, he refrained from commenting on the prospects of the company's CPUs and compute GPUs in the AI space.

Intel has submitted a permit application outlining extensive plans for expansion at its Gordon Moore Park campus (near Hillsboro, Oregon) over the next five years. The company's detailed proposals point toward building a fourth module of its D1X research and development (R&D) facility as well as rebuilding its D1A R&D fab that is decades old, according to a report by OregonLive. 

The application indicates Intel's intent to revamp its iconic R&D site, although they did not specify the financial scope of these proposed projects. The preceding upgrade, involving the third module of D1X, incurred a cost of $3 billion and resulted in an addition of over one million square feet to the campus. The upcoming expansion may surpass this, considering Intel's plans to not only add D1X module 4, but also to rebuild its three-decade-old D1A fab, construct additional buildings to support manufacturing, and implement various undisclosed enhancements. Intel predicts the installation of new equipment to commence as early as 2025, with other aspects of the project to be completed by 2028.

These planned enhancements, as outlined in the comprehensive 1,100-page air-quality permit application Intel sent to the Oregon Department of Environmental Quality in July, could potentially lead to considerable augmentation of the Gordon Moore Park campus with significant environmental implications. Intel is requesting permission to more than double its greenhouse gas emissions from Oregon sources, which would classify its Washington County manufacturing as a "major source" of regulated pollutants.

It should be noted that permit applications represent intentions rather than formal commitments from Intel. But while Intel has yet to make a official announcement regarding these plans for its Oregon campus, CEO Pat Gelsinger expressed a desire for substantial growth at the site in May.

"I would be reticent to constrain my dreams for how big it might be in the future," Gelsinger said.

The Gordon Moore Park campus currently accommodates five fabrication plants: the flagship D1X, which is a manufacturing process development facility; D1A, a development fabrication plant from the 1980s; D1B and D1C, both capable of 10nm production; and D1D, which is capable of 7nm production. With 22,000 employees, Intel stands as Oregon's largest corporate employer. 

This proposed expansion marks a significant turning point not just for Intel, but also for the state of Oregon. If these proposed developments follow the pattern of previous expansions in Oregon, the investment might amount to billions of dollars, which while lower than the tens of billions allocated for new campuses in Arizona and Ohio, it nonetheless stands as one of the most substantial capital projects in Oregon's history. The expansion could potentially lead to the creation of hundreds or even thousands of jobs.

Intel's 3nm-class process technology has met its defect density and performance targets, the company announced this week. The Intel 3 fabrication technology is on track to be used for high-volume manufacturing of Intel's upcoming codenamed Granite Rapids and Sierra Forest processors next year, according to Intel.

"Intel 3 met defect density and performance milestones in Q2, released PDK 1.1, and is on track for overall yield and performance targets," said Pat Gelsinger, chief executive of Intel, at the earnings call with analysts and investors. "We will launch Sierra Forest in the first half of 2024 with Granite Rapids following shortly thereafter, our lead vehicles for Intel 3."

Intel 3 (previously known as 5nm) is the company's 2nd-gen process technology that uses extreme ultraviolet lithography and is generally a refined Intel 4 production node (previously known as 7nm). Compared to Intel 4, Intel 3 promises an 18% higher performance per watt efficiency, denser high-performance library, reduced via resistance, and increased intrinsic drive current. 

Intel's 3nm-class node is particularly suitable for data center-grade products that tend to use large monolithic dies and consume a lot of power (so reduced via resistance is a huge benefit). So far, Intel has announced only two processors set to be made on its 3nm-class node — the server-class Granite Rapids and Sierra Forest. Furthermore, the company's Intel Foundry Services division is set to make a custom data center product for a hyperscaler on Intel 3 process technology. 

Intel 3 meeting defect density and performance goals is good news for Intel's data center division as it will enable it to offer competitive products in 2024.

Intel does not seem to be planning to use its 3nm-class process technology for client products; at least the company has not announced any so far. At present, the company is ramping up its codenamed Meteor Lake CPU for notebooks and desktops on the Intel 4 process and is gearing up for mass production of its codenamed Arrow Lake CPU on Intel 20A (20 Angstroms, 2nm-class) manufacturing technology in the coming quarters.

"On Intel 20A, our first node using both RibbonFET and PowerVia, Arrow Lake, a volume client product, is currently running its first stepping in the fab," said Gelsinger.

Today, Intel announced it had generated its first profit in two quarters, raking in $1.5 billion in net income on $12.9 billion in revenue during the second quarter of 2023, and the company posted a more optimistic outlook than expected. Much of the success came on the back of unexpected income from Intel's PC division, sending its stock up 8% in after-hours trading. Intel beat both its own projections and market consensus handily, with its EPS of $0.13 beating consensus estimates of -$0.19. 

Intel CEO Pat Gelsinger reported that the company remains on track with its audacious goal to deliver five nodes in four years, noting that the company's next-gen Meteor Lake chips, the first to use the 'Intel 4' node, are in production and on schedule for a Q3 launch. These will be the company's first high-volume consumer chips to use a chiplet-based architecture tied together with the 3D Foveros interconnect tech.

Intel's next-next-gen Arrow Lake chips, which build on that same design methodology, are already progressing through the fab, too. These chips are the company's first to use Intel's 20A node (2nm), which includes new innovations like the PowerVia backside power delivery, which Intel will be first to use, and RibbonFet Gate-All-Around (GAA) technology.

Gelsinger noted that the first stepping of the Arrow Lake chips are moving through the fab, meaning these are the first test chips of the new architecture to be put through their manufacturing paces.

Intel's consumer CPU sales in the quarter remained depressed, with revenue down 12% while operating income increased 19%. Still, Gelsinger said he expects sell-in (the number of CPUs sold into the channel) to nearly match sell-through (the number sold to customers) soon, signaling that the end of the consumer CPU oversupply looms. 

Intel expects to sell its millionth fourth-gen Xeon "Sapphire Rapids" processor in the coming days, but things still aren't very rosy on the data center side of the business. Intel's Data Center and AI Group (DCAI) saw revenue drop by 15% for the quarter while operating margins remained negative (-$200M).

Gelsinger tempered expectations for a quick rebound in server CPU sales, reporting that a significant portion of the data center and cloud spend for the rest of the year will be devoted to AI buildouts, meaning GPUs will steal from the data center budgets typically reserved for CPUs. That will result in lower sales next quarter for Intel's DCAI as more investments get diverted to Nvidia's data center GPUs. 

Intel also continues to face fierce competition from AMD's server chips, and the China market has been slow to recover. As such, the data center CPU recovery likely won't occur until the latter part of the year. Intel did note that it has seen strong interest in its Gaudi chips for AI workloads, and it now has its first Gaudi 3 wafers in hand. 

Intel Foundry Services (IFS) saw an impressive 307% year-over-year uptick in revenue, much of it from new packaging deals and sales of IMS nanofabrication tools. Still, it's important to remember that Intel's accountings have separated IFS into its own P&L, so much of its revenue comes from Intel's own internal groups. However, Gelsinger did note that the company had seen interest in its packaging services from external customers. This news comes amid a broad shortage of advanced packaging capacity in the industry, particularly for AI accelerators and GPUs. Intel has set up a packaging business unit in its foundry, so it is primed to capitalize on that opportunity. 

Intel has continued to adjust its strategy as it slims down to focus on core competencies and foundry expansions, having now exited nine businesses during Gelsinger's tenure. That has saved the company $1.7 billion this year alone, putting it on track to save $3 billion for the full year. 

Intel's revenue fell 15% year-over-year, but its trajectory looks better than analysts expected. Intel's gross margin for the quarter improved to 39.8%, a far cry from the +60% of yesteryear but still better than last quarter's 34%. The company guides for a 43% gross margin in Q3, along with $12.9 to $13.9 billion in revenue and $0.20 EPS, all of which outstripped consensus expectations. 

However, while this quarter's results and forecast look much better than expected, it will still be several years before Intel overcomes the primary hurdle to recovery — regaining its lost lead in process node technology. In the meantime, on-time delivery of its Meteor Lake and Emerald Rapids processors is paramount. 

Acer has some tough words for the U.S. government and its plans to expand domestic semiconductor production to better compete with entrenched global players. Acer founder Stan Shih said in a recent interview with Yahoo Taiwan that the U.S. is too far behind its Asian counterparts, particularly Taiwan, when it comes to producing sufficient quantities of chips that go in everything from smartphones to servers to self-driving automobiles to military hardware.

According to Shih, the U.S. didn't do itself any favors by outsourcing much of its semiconductor production decades ago. The supply chain necessary to sustain a consistent flow of chips heavily favors Asia, and there will be a significant lag in getting those operations fully entrenched stateside.

That last statement regarding supply chain deficiencies is borne out by comments made by TSMC last week. Last Thursday, TSMC chairman Mark Liu said that the Taiwanese company would delay mass production of its Arizona fab from early 2024 to 2025, partly due to a lack of cleanroom tools necessary to produce ships at scale.

More importantly, Liu added that there is a shortage of workers qualified to staff its Fab 21 production lines. "We are encountering certain challenges, as there is an insufficient amount of skilled workers with the specialized expertise required for equipment installation in a semiconductor-grade facility."  These staffing setbacks come even though TSMC flew Taiwan-based engineers to Arizona to help train new hires.

As part of the $280 billion CHIPS Act, the U.S. wants to strengthen its domestic semiconductor industry to create new high-tech jobs and as a means to protect national security interests. The U.S. is uneasy about Taiwan being the lifeblood of the world's chip supply, especially with the geopolitical concerns surrounding China's outsized influence in the region. 

Intel is one of the many companies taking advantage of the subsidies available from the CHIPS Act and is constructing the Silicon Heartland campus in Ohio. This will be the company's first all-new domestic fab site in decades. "The establishment of the Silicon Heartland is testament to the power of government incentives to unlock private investment, create thousands of high-paying jobs, and benefit U.S. economic and national security," said Intel CEO Pat Gelsinger in September 2022.

Intel has confirmed the company’s plan to pull the plug on another non-core business: servers. The chipmaker is quitting the server-building business and will sell it off to MiTAC, a leading Taiwanese electronics manufacturer and parent company of Tyan.

Dell, HP, and Inspur are the juggernauts of the server market, while Intel is one of the smaller fish in the pond. The chipmaker has multiple facets, and one of them is — or rather, was — building server products. Intel has killed off a fair share of non-core businesses since CEO Pat Gelsinger took the reigns in 2021. Some of the more notable exits include Intel’s Optane business, SSD business, networking switch business, and the company’s more recent departure from 5G modems. Intel has a strong server product portfolio, but the chipmaker’s strongest suit is obviously selling silicon.

“In line with Intel’s continued efforts to prioritize investments in its IDM 2.0 strategy, we have made the difficult decision to exit our Data Center Solutions Group (DSG). As part of this plan, MiTAC, an edge-to-cloud IT solutions provider and longstanding ODM partner of DSG, will have the right to manufacture and sell products based on our designs. We are focused on ensuring the DSG team and its stakeholders are supported during this transition,” one Intel spokesperson told ServeTheHome.

Intel has sold very few server units over the years — DSG hardly brought in significant revenue numbers for the company. So it doesn’t really come as a shock that the server-building business is the next head on the chopping block. Intel posted a net loss of $644 million in the Q4 FY2022, so this latest withdrawal from server-building is unlikely to be the last cost-cutting measure the company takes.

Intel recently launched the highly-anticipated 4th Generation Sapphire Rapids Xeon processors and some Sapphire Rapids-based servers. But now it looks like those may be the last Intel-built servers on the market — or perhaps the chipmaker is just white-boxing them for its partnering OEMs to rebadge. At any rate, Intel has transferred its server designs over to MiTAC. Tyan, a subsidiary of MiTAC, will definitely put those designs to good use.

Intel on Tuesday appointed its veteran Stuart Pann as general manager of Intel Foundry Services. Stuart Pann has never worked in the foundry industry, but he has vast experience in supply chain management, planning, and strategic allocation of resources. Apparently, Intel believes that these are the skills that IFS needs to become one of the world's leading contract makers of chips by 2030.

Stuart Pann replaces Randhir Thakur, who was instrumental in establishing Intel's foundry operations from 2021–2022, but who stepped down from the position last November. Previously, it was widely believed that Intel would appoint someone from Tower Semiconductor after it closes the takeover deal to lead IFS, but it looks like the company decided to hire its own veteran for the role. Now that IFS got its head, it begs the question of how Intel will employ executives from Tower, who bring decades of foundry experience to the company.

Pann previously served as Intel's chief business transformation officer and general manager of the company's Corporate Planning Group after he returned to the company in 2021. He knows the structure of Intel and the structure of IFS. Among other things, Pann established IDM 2.0 acceleration office.

"With deep expertise in capital and capacity strategies, supply chain management, and sales and operations planning across internal and external manufacturing, Stuart is an ideal leader to accelerate this momentum and drive long-term growth for IFS," said Pat Gelsinger, chief executive of Intel.

Before re-joining Intel, Pann held the positions of chief supply chain officer and chief information officer at HP. Prior to that, he worked at Intel as the corporate vice president and general manager of the Business Management Group, where he oversaw the pricing, revenue, and forecasting functions for Intel's microprocessor and chipset businesses.

In fact, Stuart Pann spent some 33 years at Intel from 1981 to 2014 and held various sales management positions before becoming the director of pricing and operations for the Intel microprocessor business in 1999, his LinkedIn profile reads. An important detail about the new executive of IFS is that, throughout his career, he has never worked with a foundry as a customer. He has never been responsible for chip production at Intel, and he has never worked at any contract chipmaker.

"Intel Foundry Services is a critical pillar of our IDM 2.0 strategy, and it’s been exciting to watch it grow from an idea to an operating business with a world-class IP portfolio and significant customers in less than two years," Pann said. "I am committed to championing the interests of our foundry customers and to helping them take advantage of Intel’s leading-edge process technology and full stack of open systems foundry offerings so they can succeed in a world that demands ever more computing."

While the appointment of Stuart Pann is a bit surprising, it's good to see that Intel's IFS finally has a leader. At the very least, the business unit will get a strategy for how to reach its strategic goal and become the world's No. 2 foundry by the end of the decade. And if it can manage that, then it can start thinking about how to overtake TSMC and regain its former lead in process technology.

Intel CEO Pat Gelsinger announced on Twitter today that Raja Koduri, the company's current Chief Architect, is leaving the company to found a generative AI gaming software startup. Koduri's exit comes five years after he joined the company in November 2017 and on the heels of a restructuring of Intel's AXG graphics unit that was announced at the end of last year. 

Koduri had assumed his position as leader of AXG last year but stepped back to be a Chief Architect after the restructuring, returning him to a position he originally held when he arrived at Intel in 2017 after a five-year stint at AMD. 

"Thank you @RajaXg for your many contributions to Intel tech & architecture-especially w/high-performance graphics that helped bring 3 new product lines to market in ‘22. Wishing you success as you create a new software co. around generative AI for gaming, media & entertainment," Gelsinger posted on Twitter. 

Raja Koduri responded, thanking Gelsinger and Intel for his time at the company. Koduri also promised to share more details about his newest adventure in the coming weeks. 

Intel has already restructured the graphics unit, so the company tells us there are no pending organizational changes due to Koduri's exit. Intel's Jeff McVeigh will continue to serve in his current role as the interim leader of the AXG team as Intel searches for a permanent leader.

Koduri joined Intel in the same time frame as fellow ex-AMD'er Jim Keller. In tandem with Keller and Murthy Renduchintala, Koduri helped design and align Intel's silicon portfolio under a new six pillar strategy that played to the strengths of the company's IP. Unfortunately, that initiative lost steam after Keller, and then Renduchintala left the company in 2020 in the wake of the delays around the company's 7nm process node.

Koduri soldiered on as the head of the Architecture, Software, and Graphics group, eventually receiving a promotion to the position of Executive Vice President in April 2022.

During his tenure, Koduri helmed the creation and launch of Intel's Arc graphics cards and Ponte Vecchio GPUs. He was also responsible for developing Intel's first Bitcoin-mining 'Blockscale' ASICs that are currently shipping. On the one hand, considering it was the first major company in 25 years to enter the space, Intel's entry into the discrete GPU market has been mostly successful. However, Intel's long-awaited Ponte Vecchio arrived late, and the company recently decided to axe its Rialto Bridge successor.

Meanwhile, the Intel Arc graphics cards for the desktop PC also arrived late, putting them in a less favorable position relative to competing AMD and Nvidia GPUs. Intel has steadily dropped pricing while improving drivers and performance after the launch, efforts that will now carry on in Koduri's absence.

Koduri has completed a four-year stretch at Apple, two stints at AMD totaling roughly 13 years, and five and a half years at Intel. He is now off to found a generative AI startup. We'll be sure to have coverage when we learn more details about his newest venture. 

AMD approved hefty six-figure bonuses for several top execs earlier this month — at least four AMD VPs and the CEO, Dr. Lisa Su, will pocket substantial annual cash bonuses. In contrast, Intel’s diligent team faces painful salary cuts and suspended bonuses despite the bullish statements from Intel CEO Pat Gelsinger in 2022 when he talked about AMD being in the rear-view mirror.

Dr. Su received the biggest performance bonus — nearly a million dollars ($918,800) — for steering the red team’s ship through choppy waters to enjoy the success we continue to see. The four VPs named in the SEC filing will receive bonuses between $300,000 and $375,000. One of the VPs most readers will be familiar with is Mark Papermaster, the CTO, and ELVP of Technology and Engineering.

As for Intel, the company faces mounting difficulties highlighted during its most recent catastrophic quarter. In brief, mid-level and higher-ranked execs face pay cuts between 5 and 15%, with Pat Gelsinger taking a 25% cut. Wage raises and bonuses are out of the picture for these same execs, but hourly employees will still receive bonuses.

AMD and Intel target many of the same markets, but some key differences exist in the company operations and structures. First, Intel’s foundry business weighs heavily on its finances and fortunes, and it is busy restructuring and making massive investments around the globe to boost its manufacturing reach and prowess. For instance, Intel's planned $40 billion in investments for the new Arizona and Ohio fabs come as the company's first-quarter revenue dropped 40%, meaning that extraordinary actions must be taken.

Recessionary forces are also in the driver's seat (war, Covid hangover, etc.), affecting the entire industry. Nevertheless, several computer business leaders and industry insiders see a turn for the better in the second half of this year.

Compared with Intel, AMD doesn’t have as much of a semiconductor manufacturing burden. It is more nimble and light after divesting manufacturing operations and the massive investments needed to build and maintain a competitive foundry business. On the flip side, when the boom comes, AMD chipmaking partners will make hay and demand higher prices for their in-demand services.

For Intel employees currently enduring pay cuts, subsidies from multiple governments worldwide should help make the largest Intel investments successful in their respective locations. Intel also cut its long-standing dividend to free more cash for investment amidst its belt-tightening exercises, and also recently told employees that it will reverse its pay cuts later this year. That means that, as the cycle turns, the lean times could be followed by times of plenty, especially if Intel's drastic turnaround plan, which includes a pivot to the IDM 2.0 model, comes to fruition. 

Pat Gelsinger, chief executive of Intel, this week addressed rumors that the CPU giant was delaying products made using the company's own Intel 3 and TSMC's N3 (both are 3nm-class) fabrication technologies. The CEO re-emphasized that all 3nm projects announced so far were set to be released in 2024. 

"The 3nm programs are on track, both that with TSMC as well as our internal Intel 3 programs Granite Rapids and Sierra Forest in particular," said Gelsinger at the company's Intel Capital Allocation Update conference call. "I am somewhat amazed by some of these rumor mill discussions that come out. You might notice there were similar ones on Intel 4 a few months ago, and also with some of our other TSMC programs, which were patently false at the time as well." 

So far, Intel has disclosed three products set to be made using 3nm class manufacturing technologies.

 Internally, the company is set to produce its datacenter-oriented Granite Rapids (based on high-performance cores) and Sierra Forest (based on energy-efficient cores) processors on its Intel 3 node (previously known as 5nm). This fabrication process is essentially a refined version of Intel 4, but with improved performance per watt, higher drive currents, decreased via resistance and denser high-performance libraries. All of these features are particularly beneficial for datacenter-class processors, though reduced via resistance should be good for mobile CPUs too. Meanwhile, so far Intel disclosed only two products set to be made on its 3nm-class node internally. 

With external 3nm projects, things are a little more complicated. Officially, Intel is set to use TSMC's N3 for a graphics tile of its client processors codenamed Meteor Lake and Arrow Lake due in 2023 and 2024, according to a slide that Intel has shown a number of times. In August, 2022, a market research firm said that Intel decided to postpone production of Meteor Lake's graphics tile on TSMC's N3 process. Back then, Intel did not comment on any 3nm-based projects specifically, but said that Meteor Lake was on track to be released in 2023.  

Now, the company says that its Arrow Lake product comprising of a compute tile produced on Intel's 20A (2nm-class) node and a graphics tile made on TSMC's N3E is on track for 2024. Keeping in mind that by the time Arrow Lake CPUs are set to hit the market TSMC will have rather vast experience with its 3nm-class process technologies, it is unlikely that Intel might decide to delay Arrow Lake because of issues with TSMC's N3/N3E itself. 

"So, no changes in the programs as have indicated," said Gelsinger. "Good solid execution on both the client, the  server, and AXG [accelerated graphics] side. We are gaining momentum with foundry customers as well. So, I feel good that we have turned the corner on many of the execution challenges. You know, these rumors, like many others, will be proven by our execution to be firmly false."

Intel on Wednesday said that its board of directors had reset its dividend policy to reduce quarterly dividend payments in a bid to maintain spending on new manufacturing capacity that is set to be deployed in the coming years, something that the company considers critically important. The decision is meant to ensure that the company will have enough financial flexibility amid dropping revenue and profits. 

Starting from June 1, 2023, Intel will pay $0.125 per share quarterly on the company's common stock, which means that the company will pay investors $2 billion instead of $6 billion this year. The company has reconsidered its dividend policy for the first time since 1992 amid major challenges that it faces in the short term and long-term future.  

Intel said on Wednesday that it would prioritize investment in strategic capital and alter the timing of near-term capacity expansion in response to lower demand for its products in the short term. Essentially, this means that Intel will prepare for future expansions (i.e., build fab shells) and delay procurement of certain wafer fab equipment if possible. 

"Prudent allocation of our owners’ capital is important to enable our IDM 2.0 strategy and sustain our momentum as we rebuild our execution engine," said Pat Gelsinger, CEO of Intel. "We remain on track to deliver five nodes in four years and continue to expand the IFS (Intel Foundry Services) customer base." 

In recent years Intel has lost its manufacturing technology leadership to TSMC due to overly aggressive goals with its 10nm fabrication process that led to major delays for high-volume manufacturing. These delays and management missteps led to delays of major products, which is why Intel lost some of its datacenter CPU performance leadership to AMD.  

After Pat Gelsinger became chief executive of Intel in 2021, he introduced the company’s IDM 2.0 strategy that is meant to bring back product and process technology leadership back to Intel. Under the new strategy, Intel plans to aggressively introduce new process technologies, expand its manufacturing capacity to offer foundry services to other companies, and outsource some of its production to contract chipmakers when and if it makes sense.  

But modern process technologies are expensive to develop, which is why Intel needs to produce more chips — including chips for others — to invest enough in new nodes. As a result, IDM 2.0 requires a lot of capital — tens of billions of dollars over the next few years — as Intel needs to ensure that it has enough capacity for its own products as well as for its foundry customers. To ensure that it has enough capital to build out required capacity, Intel introduced its Semiconductor Co-Investment Program (SCIP) — though so far the latter has generated only one major deal. 

Due to soft demand for PCs and lower margins of its datacenter division, Intel's revenue and profits suffered major declines in the recent quarters and are unlikely to rebound this year. Therefore, Intel needs to reduce all of its spendings, including dividend. Intel's abilities to invest declined and now the company is looking at around $20 billion CapEx in 2023. 

Intel's management re-emphasized today that the company was on track to 'launch' the next generations of its client and server processors in 2023 and 2024. 

"We are well into the ramp of 13th Gen Intel Core and 4th Gen Intel Xeon Scalable processors, and we look forward to the launch of Meteor Lake and Emerald Rapids in 2023 and Granite Rapids and Sierra Forest in 2024," said Gelsinger.

In late January, we reported that Intel secured a leading "cloud, edge, and data center solutions provider" that will use its Intel 3 node. Intel is bolstering its efforts to sign lucrative contracts for its Intel Foundry Services arm, a lynchpin in CEO Pat Gelsinger's efforts to increase revenue.

But while Intel produces most of its chips (and produces chips for other vendors), it also has contracts with competitors like Taiwan Semiconductor Corporation (TSMC) to produce chips for its Arc discrete GPU family. To that end, DigiTimes reports that Intel's collaboration with TSMC on products using the latter's 3nm node has hit a slight snag.

Previous reports indicated that Intel's 15th generation disaggregated multi-tile/multi-chiplet Arrow Lake processors, which will purportedly use TSMC 3nm for the GPU tile, would launch in Q3 2024. Now, it's reported that Intel is delaying orders with TSMC until Q4 2024. So if this report is accurate, the first Arrow Lake processor will trickle in late Q4 2024 into Q1 2025.

However, Arrow Lake is roughly two years away, so we're quibbling about a couple of months for a product two generations out. Leading up to Arrow Lake, Intel will allegedly launch Raptor Lake-S desktop processors later this year with enhanced performance for enthusiasts and workstation markets. Raptor Lake-S will be followed by the 14th generation Meteor Lake family later this year. "On Intel 4, we are ready today for manufacturing and we look forward to the MTL (Meteor Lake) ramp in the second half of the year," said Gelsinger during Intel's Q4 2022 earnings call.

Meteor Lake will be the first collaborative effort with TSMC on the CPU side. It is comprised of an Intel 4 (7nm) compute tile along with TSMC-manufactured GPU (5nm) and SoC (6nm) tiles using Foveros 3D technology that we first saw with the mostly forgotten Lakefield processors. In addition, meteor Lake will also become Intel's first CPU family to incorporate extreme ultraviolet (EUV) lithography.

DigiTimes alleges that the Meteor Lake laptop processors will launch before their desktop counterparts, a change from Intel's Raptor Lake and Alder Lake cadence. It's also suspected that Meteor Lake and Arrow Lake will share a common platform, like Alder Lake and Raptor Lake, meaning we'll get a new socket and chipsets.

Update 1/28/2022 6am PT: An Intel representative responded to our queries, telling us that the decision to end the Intel Pathfinder for RISC-V has no impact on Intel Foundry Services (IFS) or the Horse Creek platform. The company is still committed to supporting silicon on all three major instruction sets — x86, Arm, and RISC-V. The representative indicated that Pathfinder was an 'innovation project' from a small team at Intel, but didn't divulge a specific number of employees. We've also adjusted the text below accordingly. 

Original Story 1/26/2022 8pm PT:

Intel's disastrous Q4 2022 earnings found the company losing $661 million and its margins crashing to the lowest point in decades, so it isn't surprising that the company announced new cost-cutting measures. That includes news that it would no longer invest in new products for its networking switch business, effectively sunsetting the unit much like it recently decided to end its Optane Memory business. Surprisingly, Intel also pulled the rug from under its respected RISC-V Pathfinder program without a formal announcement.

"NEX continues to do well and is a core part of our strategic transformation, but we will end future investments in our network switching product line, while still fully supporting existing products and customers," said Intel CEO Pat Gelsinger. "Since my return, we have exited seven businesses, providing in excess of $1.5 billion in savings," he added. However, Gelsinger also noted that he is still doing a thorough analysis across Intel's portfolio to look for other cost-saving measures in areas that don't generate strong returns.

Intel's networking switch business stems from acquiring Barefoot networks in 2019 for an undisclosed sum (the company had raised $144 million over several investment rounds). The Tofino series of network switches gave Intel yet another tool in its arsenal of data center 'adjacencies' that it could leverage to expand its data center revenue. However, this unit faces stiff competition from entrenched players like Broadcom, Cisco, and Nvidia's Mellanox, making it an easy cost-cutting target. 

Intel did appear to invest in the network switch business for the long haul — the company had even demonstrated integrating its own silicon photonics engines into the Tofino switches, making it a key addition to its existing lineup of silicon photonics tech. Intel also later developed the Tofino 3 switch. That development work now ends as Intel winds that business down. In the meantime, Intel will continue to support its existing customers and products and also says it will intensify its focus on developing its new IPUs. There's no word on how many Intel employees could face layoffs as a result of the action.

The network switch business marks the seventh non-core business Intel has ended since Pat Gelsinger's arrival, including winding down Optane Memory production, jettisoning the company's drone business, and selling the SSD storage unit to SK Hynix to generate $1.5 billion for investment in areas that are core to Intel's business. Intel has also placed workers on voluntary leave and laid off 544 workers in California while deciding to shelve plans for a mega-lab in Oregon and cancel its planned development center in Haifa.

Intel also surprisingly ended its Intel Pathfinder for RISC-V program without any public statements, aside from sudden notices to participants that the company had discontinued the program. A visit to Intel's Pathfinder website finds the above notice that "Intel is discontinuing the Intel Pathfinder for RISC-V Program effective immediately." Intel's site also cautions that "Since Intel will not be providing any additional releases or bug fixes, we encourage you to promptly transition to third-party RISC-V software tools that best meet your development needs."

The Pathfinder program was a show of goodwill from the x86-exclusive Intel to the RISC-V community as it looks to foster an ecosystem of customers for its Intel Foundry Services (IFS). The program created a unified development environment for both industrial users and hobbyists, so it was split into two tiers — a Professional Edition for industry users, and a Starter Edition for researchers and hobbyists.

The program began in August 2022 and was meant to help accelerate the development of RISC-V chips through a unified integrated development environment (IDE) using industry-standard toolchains. The tools allowed users to build RISC-V chips and then run them on an FPGA. Many of the large RISC-V companies, not to mention RISC-V International, supported the program.

Intel also has many other RISC-V initiatives underway. Intel and SiFive just jointly announced the HiFive Pro P550 RISC-V development board a mere three days ago, and it is scheduled to be available this summer. The board is powered by a Horse Creek processor fabbed on the Intel 4 process by Intel Foundry Services. Intel also has a joint investment with the Barcelona Supercomputing Centre (BSC) to build a $426 million laboratory to develop RISC-V processors for future zettascale supercomputers, AI accelerators, autonomous vehicles, and high-performance computing.

Intel even created a $1 billion fund to help companies develop a wide range of chips that it will build in its IFS foundries, including x86, Arm, and RISC-V designs.

Gelsinger's comments that Intel is also looking for other cost-cutting targets across the company mean that we could see further cuts in the future. 

Intel has officially abandoned its plans to build a mega lab in Hillsboro, Oregon. The Oregonian received a statement today saying that the $700M facility will not be built, but the R&D work planned for the center has already started in other venues across the state. Intel's decision aims to reduce costs and increase efficiency and will contribute significantly to Intel's $3B savings target for 2023.

“We are looking to reduce costs and increase efficiencies through multiple initiatives,” wrote Intel spokesperson Penelope Bruce in a statement received by the Oregonian newspaper. “This includes exploring more cost-effective real estate options to continue our data center R&D work in Oregon that is already in progress.”

This major business decision from Intel comes hot on the heels of the reported cancellation of its IDC21 R&D center in Israel. The underlying reason is the same — cost-cutting — and the underlying problem remains the recent history and pretty gloomy outlook for the semiconductor industry, as cyclical events hit and recessionary forces continue to dominate.

Construction of the mega lab at Hillsboro, Oregon, was supposed to begin this year, and it sounded rather ambitious. The facility was planned as a 200,000-square-foot lab at the company’s Jones Farm campus. Its initial major works would be focused on new technologies for cooler and more efficient data centers. Intel assures that the work will continue within Oregon at some of the existing Intel premises throughout the state.

Intel's Oregon and Israel cancellations could save a combined sum of $900M, meaning Intel would still need to make over $2B in cuts this year to stay on track and satisfy the bean counters and shareholders.

Other targets for sizable cuts might include some of the flagship European investments due to progress in earnest in the coming months. We have already heard some murmurings about Intel delaying its biggest European investment — the Magdeburg mega fab. However, such chitter-chatter could be a tactic to squeeze improved subsidies from the EU, which is seen to be desperate to be ‘self-sufficient’ in semiconductors, hence the EU Chips Act promoted by the European Commission.

It has also been interesting to see Intel’s CEO play something of a political game to help bolster support. Speaking from the WEF in Davos earlier this week, Pat Gelsinger told CNN that while oil reserves defined geopolitics for the last 50 years, semiconductor supply chains will be more important over the next 50. Thus he cannily touted greater investments from nations and trading blocs to lay the foundations of “a geographically balanced, resilient supply chain.” If Gelsinger can successfully appeal to US and European governments to up their CHIPs Act contributions and similar, it could go a long way to solving Intel's remaining $2B+ in targeted cuts this year.

It may not be quite the 30 GHz that Intel CEO Pat Gelsinger predicted back in 2002, but Intel's Core i9-13900KS Special Edition processor, which is available on shelves today for $699, is the world's first consumer CPU to run at 6 GHz without overclocking. With a whopping 250W base power specification, it's also now officially the most power-hungry desktop CPU in history — it peaks at 320W in a new Extreme Power Delivery Profile.

Notably, the 13900KS' peak of 6 GHz is 300 MHz faster than the 5.7 GHz for AMD's Ryzen 7000 processors, but AMD has a special series of Ryzen 7000X3D chips that will square off with the 13900KS for the title of the world's fastest gaming CPU.

AMD's competing chips arrive next month, and we fully expect that AMD will sample its chips to the press for review on the as-yet unrevealed launch date. In contrast, Intel sent out its announcement without samples provided to the press in advance, which will naturally lead to speculation that the company doesn't expect the chips to hold the gaming performance lead against AMD's upcoming X3D processors. Additionally, Intel officially positions the 13900KS as the 'world's fastest desktop processor' instead of using the 'world's fastest gaming processor' tag that it has employed for other chips in the past — read into that what you will.

The Core i9-13900KS is functionally identical to the current fastest gaming chip in the world, the 13900K, but the extra 'S' in the name denotes that this is premium-binned silicon that hits 6 GHz on two cores — 200 MHz faster than the 12900K.

The chip also has a 150W Processor Base Power (PBP) rating, which is 25W higher than the 13900K, also making it the world's most power-hungry desktop PC processor at its base TDP. Intel has specified the Maximum Turbo Power (MTP) spec at 253W but has a new Extreme Power Delivery Profile that enables that up to 320W with an ICCMax of 400A. The processor is fully warrantied to run at this peak power consumption.

Intel recently demoed the chip hitting 6 GHz on two cores with standard off-the-shelf Corsair AIO water cooling, but didn't specify the size of the cooler (the company has clarified that it sees "good performance with a 360mm AIO cooler"). The chip's peak frequency relies on Intel's Thermal Velocity Boost (TVB) tech, meaning the chip will have to be below a pre-defined temperature (70C) to hit the 6 GHz peak. Naturally, systems with custom watercooling will extract the biggest benefit.

The Intel Core i9-13900K recently took the all-time frequency world record of 8.812 GHz, dethroning the previous record holder, AMD's legendary FX-8370, by 90 MHz. Intel selects its premium-binned 13900K silicon for the 13900KS, so it is guaranteed to be among the very best silicon the company has to offer. That will make the chips very attractive to overclockers, as paying the extra $110 for the KS model improves your odds in the silicon lottery and essentially assures that you're getting a cherry chip (below, we embedded a video of Intel Fellow Guy Therien explaining how binning works). These chips will be available in limited quantities, but Intel hasn't released a firm estimate of how many units will be available.

Intel has been vocal that the company will raise pricing on its CPUs to reflect the inflationary environment, and it has already raised the pricing of its previous-gen 12th-gen CPUs while oddly leaving the new 13th-Gen Raptor Lake at their original pricing — at least for now. As such, the 13900KS is $124 less than the current pricing of the previous-gen Core i9-12900KS, which peaked at 5.5 GHz. For the record, the 12900KS originally debuted at $739, so the $699 price tag for the 13900KS is $40 lower than the debut price of the previous-gen model.

Intel's previous KS models have come in special packaging, but Intel hasn't shared details about the 13900KS yet.  

As an interesting aside, while the Core i9-13900KS's achievement of 6 GHz sets a record for a shipping desktop PC processor, it doesn't quite reach the lofty peaks that were once predicted. As you can see above, Intel CEO Pat Gelsinger, then the CTO, predicted back in 2002 that processors would hit 30 GHz by 2010. Of course, that was before we began to see the breakdown of some of the fundamental laws, like Dennard Scaling, that has slowed progress tremendously.

However, after years of frequency stagnation and limited core counts, fierce competition between Intel and AMD finds them once again pushing the limits. That's good for all of us, even though it does increasingly come at the cost of prodigious power consumption from both players.

The Core i9-13900KS is available today at retail with a $699 1K unit price (Intel's recommended pricing for volume buyers, but pricing is typically higher in stores at first). You'll also find Intel's new fastest chip in systems from its channel and OEM partners, too. You can expect to see a review here in the coming days. 

Randhir Thakur, the head of Intel's contract chip production unit, has resigned, according to a report from The Register that was confirmed by Intel. He will continue to lead Intel Foundry Services through Q1 2023 to ensure a smooth transition to a new leader. 

Pat Gelsinger, chief executive of Intel, sent an email to the company's employees thanking Randhir Thakur for helping establish IFS and being instrumental to the company's IDM 2.0 business model. 

"Randhir has been a key member of the Executive Leadership Team for the past two and a half years and has served in several senior leadership roles since he joined us in 2017," Intel's CEO wrote in the email quoted by The Register. "His contributions to our [Integrated Device Manufacturing] 2.0 transformation are many, but most notable is his leadership in standing up our IFS business." 

Indeed, Randhir Thakur has done quite a lot to be proud of at IFS. During his tenure, Intel announced the pending acquisition of Tower Semiconductor (which would immediately make Intel one of the biggest contract makers of chips). He was also instrumental in inking deals with giant chip developers like MediaTek, which also happens to be one of TSMC's largest customers. This contract was a major win for IFS, and the outfit also won a contract with the U.S. Department of Defense for the Rapid Assured Microelectronics Prototypes - Commercial (RAMP-C) program. 

But IFS is far from an ideal contract chipmaker, at least based on what we know about Intel's process technology roadmap through 2025. The company's plans announced so far largely align its production nodes to its own fabrication processes, which is good for Intel as an IDM (Integrated Design Manufacturer) player, but might not be enough to persuade companies like Apple, AMD, and Nvidia to use IFS services for their high-volume products. 

Intel's most logical next move is perhaps to hand the foundry division over to the management of Tower Semiconductor. The transaction is set to close in February 2023, which is around the time Randhir Thakur is set to leave. Tower Semiconductor has developed its roadmap together with its customers for years, so the management experience will be critical for the future of IFS.

The Intel Foundry Services business unit earned $171 million in the company’s fiscal third quarter of 2022, which may not sound much given that it is about 1.1% of the company’s revenue. The company has yet to offer its leading-edge technologies to big customers.

Intel CEO Pat Gelsinger said on Thursday announced that the company would soon undergo a round of "targeted cuts." As reported by Oregon Live, the CEO took to a video conference with company employees where he described the cuts as necessary in the wake of high costs and low margins on the myriad of products Intel develops, manufactures and distributes. 

The cutbacks aim to reduce Intel's operational expenses to and unlock a way back to profitability. This is happening just months after Intel and other semiconductor companies were awarded a cool $52 billion in government subsidies in the U.S. alone.

Word on the wire estimates Intel may be looking to cut as much as 20% of its workforce in certain divisions, including sales and marketing - equating to thousands of employees out of the company's ~121 thousand employed in 53 countries around the globe. The need to rationalize its operational costs likely stems from the utter beating of Intel shares in just a year, with the company's stock valuation dropping by 50% on the back of a particularly intense macroeconomic pressure. The decline happened even as Intel sought more and more governmental funding - something Pat Gelsinger himself said might have negatively impacted the company's execution.

That impact on execution and the worldwide demand decline for Intel's products was plain to see on the company's Q2 earning reports, where Intel posted a $454 million loss against a clean $5 billion profit during Q2 2021. And considering the current state of the global semiconductor market, Intel's revenue for Q3 2022 could see a further 15% decline.

However, Intel isn't the only tech giant grappling with these issues. AMD recently corrected its revenue projections with an expected $1.1 billion decline for Q3, Nvidia revised its estimates with a $1.4 billion reduction of its own, and Apple reportedly cut component orders for its latest iPhone 14 product by as much as 90%. But while Intel has now confirmed it's going the layoff route, AMD and Nvidia - two companies left out of the U.S. government's $52 billion subsidy and equally affected by the market turmoil - still haven't announced anything to that effect.

We're live at the Intel Innovation keynote. You can watch along with us at Intel's Innovation site, and the show is set to start in about 30 minutes. We anticipate Intel will be revealing all the major details for its upcoming Raptor Lake 13th Gen CPUs, alongside Arc Alchemist GPUs. There will be various guests from Intel's partners as well, though probably not for anything too exciting if you're a PC enthusiast.

If you have comments or questions during the presentation, hit us up on Twitter: @PaulyAlcorn and @JarredWalton, or alternatively @TomsHardware.

Just one day after AMD officially launched its Zen 4 CPUs — check our Ryzen 9 7950X and Ryzen 5 7600X review — Intel Innovation kicks off with a keynote from CEO Pat Gelsinger. We expect we'll hear plenty about the upcoming Raptor Lake product line and 13th Gen CPUs, Arc GPUs, and various other topics.

Intel CEO Pat Geisinger has taken to the stage.  

Gelsinger's shirt has 'GEEK" written in binary code. 

Gelsinger said that a few technology superpowers have been pushing the digital world along, including compute, connectivity, cloud and edge infrastructure, and AI intelligence, but now he is adding 'sensing' to the list. 

Gelsinger talked up Intel's new IDM 2.0 strategy, and how Moore's Law plays into the strategy. Gelsinger says Moore's Law isn't dead -- someone tell NVidia CEO Jensen Huang. Intel plans to develop five new nodes in four years. 

Intel will continue to work to build more semiconductor production capacity for IFS, and that includes its acquisition of Tower Semiconductor. Intel plans to make its Intel Foundry Services into a systems-level producer of chips. That requires producing not only chip wafers, but also chip packaging, software, and chiplets. On the latter, Intel is working to create industry standards, like UCIe, that foster a chiplet ecosystem. More than 80 companies are participating. Gelsinger then played a video showing leaders from TSMC and Samsung voicing their support for UCIe. 

Intel is investing in the talent ecosystem, too, by working with universities to grow the next generation of chip designers. Intel's University Shuttle Program is already well underway. 

Gelsinger said that GPUs play a critical role in the future. Gelsinger said GPUs were on his list of unfinished tasks when he left Intel, but he is back to solve that problem. He then introduced the Flex 170 and Flex 140 data center GPUs. This has a hardware-based AV1 decoder for cloud providers. The GPUs also support OneAPI and all the major AI distributions. 

Gelsinger also flashed a Ponte Vecchio GPU and a Sapphire Rapids CPU that will power the Aurora supercomputer. Gelsinger announced that Intel is FINALLY shipping the silicon to the Aurora system. 

Gelsinger announced that Intel will help reduce excessively high GPU pricing for gamers, by introducing the Arc A770 GPU. He said it is 65% faster than the competition in ray tracing. It is available October 12th at $329. Cards are on the way to reviewers. 

Here's the obligatory pic of the card. 

Gelsinger introduced the company's new AI director

Intel has a new neural coder that removes CUDA from code so it can run on Intel's OneAPI. Intel demoed the one-click solution that stripped out the code. 

Gelsinger wants to make AI models easier to deploy, so it has developed a tool that helps correct AI models that have become outdated. The company demoed its new software at work. 

Intel is launching Intel Getty, an AI training software. 

Gelsinger announced the Raptor Lake processors. They will come to market on October 20. You can read our coverage here. 

Intel will release a 6GHz SKU, in limited volumes. It will come to market next year. 

Intel will launch over 50 Raptor Lake chips and 500 designs. 

Samsung demoed a new Samsung flexible display that can shrink or expand by rolling. The 17-inch screen is for PCs.

Intel is working on creating a seamless method of extending displays to PCs. You can also use iOS and Android devices to cast your screen to a PC. The new Unison software is coming to new laptops this holiday season from Acer, HP and Lenovo. 

Gelsinger played a video of a much younger version of himself talking about optical photonics, and how the goal is to make that part of every chip Intel makes. The video was from two decades ago. Intel connected to its lab in Scotland for a demo of a new optical connector that connects directly to an Intel CPU. 

Intel also demoed attaching and reattaching the chip to the optical cable. 

Gelsinger brought Linus Trovalds, the creator of the Linux kernel, on stage to talk about Intel's commitment to open source. 

Gelsinger presented Trovalds with an 8086 programming guide. 

Intel presented Linus Trovalds with the first-ever Intel Innovation award. 

Gelsinger closed out the keynote, saying that we have taken a peek into the future that we will all create together. And that's a wrap. 

Intel CEO Pat Gelsinger is shutting down rumors that Intel is closing its GPU development. In a tweet, Gelsinger wrote that he has received his own personal A770 from Intel graphics head Raja Koduri and that the company is "now getting [the] first batch of A770 cards ready for retail[.]"

(Click "See more" below to expand the tweet.)

Once the A770 hits the market, it will mark an important step for Intel. The company has shipped mobile Arc GPUs in laptops, though they're only in a few models. The Arc 380 shipped first in China, and it was plagued with driver issues and faced poor reviews.

This led to rumors that Intel would drop GPUs on the back of news that Intel may exit more businesses in 2023. Last week, Koduri shrugged off the scuttlebut, and now Gelsinger is promising the A770 will ship.

What's not clear is where the A770 will ship. The A380 was only in China, and we haven't heard whether or not the A770, the first card Intel will ship with gamers in mind, will follow suit, or whether Intel will bring its Alchemist GPUs to the United States, Europe, and other international markets. That should be the plan, but is it still the plan?

Intel also doesn't have the best timing here. When Intel announced it was getting serious about GPUs, we were in the middle of a massive component shortage that made a third competitor in the space seem like a necessity. Getting one of the best graphics cards meant constantly refreshing online stores or waiting outside of brick and mortar retailers to avoid paying scalpers.

This tweet comes as GPU prices from Nvidia and AMD are normalizing, often dropping below the suggested retail price as mining operations that focused on Ethereum are unloading their cards following the Merge. Furthermore, Nvidia is expected to announce at least some of the RTX 40-series graphics cards tomorrow during the fall GTC 2022 keynote.

Still, more competition in the space could be good. Intel has previously suggested the Arc A770 delivers stronger ray tracing performance than a GeForce RTX 3060 at 1080p on ultra settings. Combined with Intel's XeSS upscaling, it seems Intel won't be competing at the top-end, but may be able to balance between price and performance in the middle of the pack.

Intel is set to hold a ground-breaking ceremony for its first two fabs in a campus located in Licking County near Columbus, Ohio. The all-new manufacturing site will be able to house up to eight chip fabrication facilities and will require investments of around $100 billion over time. President Joe Biden and Ohio governor Mike DeWine will join Intel's Pat Gelsinger at the ceremony. 

The first two fabs in Intel's Ohio, Silicon Heartland manufacturing site will cost Intel around $20 billion, and will be built simultaneously. These fabs are expected to come online in 2025. The new campus will span around 1,000 acres (4 square kilometres) and will be able to house up to eight semiconductor fabs as well as support operations and ecosystem partners. To buildout the site, Intel will need to invest some $100 billion, the company once said.  

Intel does not disclose which production nodes will be used at its new fabs, but given that they are projected to come online in 2025, we summize that the facilities will be able to make chips on Intel's 20A and 18A fabrication technologies and will be ready for more advanced manufacturing processes. That said, expect the new fabs to extensively use current-generation extreme ultraviolet (EUV) lithography with 0.33 numerical aperture as well as utilize next-generation EUV tools with 0.55 NA.

These fabs will employ a staff of 3,000 across manufacturing and engineering, producing chips both for Intel as well as its Intel Foundry Services (IFS) clients. Furthermore, the new facilities could create about 7,000 local construction jobs.  

The Ohio campus will be Intel's first all-new manufacturing site in decades. Recently Intel built new fabs at its existing sites in Arizona, Ireland, Israel, New Mexico, and Oregon. By contrast, the Silicon Heartland campus in Ohio is set to be built from scratch and is expected to add significant manufacturing capacity for Intel as well as its ISF customers, thus being instrumental to execution of Intel's IDM 2.0 strategy. Also, the site (along with Intel's fabs in Arizona and other companies' fabs) will play an important role in bringing leading-edge semiconductor manufacturing back to the U.S.

"Today marks a pivotal moment in the journey to build a more geographically balanced and resilient semiconductor supply chain," said Pat Gelsinger, Intel's chief executive. "The establishment of the Silicon Heartland is testament to the power of government incentives to unlock private investment, create thousands of high-paying jobs, and benefit U.S. economic and national security. We would not be here today without the support of leaders in the administration, Congress and the state of Ohio, who share a vision to help restore the United States to its rightful place as a leader in advanced chipmaking." 

To support Intel's Silicon Heartland, a number of Intel’s partners, including Air Products, Applied Materials, LAM Research and Ultra Clean Technology have indicated plans to establish local presence to support the new operations.

Intel CEO Pat Gelsinger spoke at the Evercore ISI TMT conference yesterday, saying that the company expects to continue losing data center market share throughout at least 2023 and will only begin regaining in 2025 and 2026. Gelsinger also said that the company would likely exit other businesses, much like it recently began exiting Optane memory, as it continues to narrow its focus to its core competencies. 

Intel's recently delayed its Sapphire Rapids launch again, with the chips now slated to arrive in 2023. Gelsinger remarked that while the new chips are 'better than the AMD alternatives" in power and performance and will win in some benchmarks, the advantages aren't dramatic enough to slow AMD's advance. As a result, Intel's data center business won't grow at the same rate as the market, meaning the company will continue to lose market share. 

"We do expect that overall our data center business grows every year as we go forward. From where we are, as we said, Q2, Q3 [is] the bottom. But we believe that we're still losing share at least through next year," Gelsinger said.

"Competition just has too much momentum, and we haven't executed well enough. So we expect that bottoming. The business will be growing, but we do expect that there continues to be some share losses. We're not keeping up with the overall TAM growth until we get later into '25 and '26 when we start regaining share, material share gains," Gelsinger added. Notably, the statement isn't definitive about the company's performance in 2024 — Gelsinger specifically stated that the company wouldn't begin regaining market share until 2025.

"Now, obviously, in 2024, we think we're competitive. 2025, we think we're back to unquestioned leadership with our transistors and process technology," Gelsinger said. 

AMD has already taken data center market share from Intel for 13 consecutive quarters, reaching 20.2% of the market, and Gelsinger's comments point to at least five more quarters of share losses — and perhaps more.   

Gelsinger pointed to the company's Sierra Forest processors as a key innovation that will help the company address the other chip architecture steadily siphoning off market share — Arm. The Sierra Forest Xeon processors have efficiency cores optimized to provide the utmost power efficiency and performance density, so they'll have higher core counts. 

"Well, when we deliver the Forest product line, we deliver power performance leadership versus all Arm alternatives, as well. So now you go to a cloud service provider, and you say, 'Well, why would I go through that butt ugly, heavy software lift to an ARM architecture versus continuing on the x86 family?'" Gelsinger said.

Intel's Sierra Forest processors, which the company designed at the behest of its largest customers, look promising. However, Sierra Forest isn't scheduled to arrive until 2024. 

Meanwhile, AMD's 5nm Bergamo chips, which employ 128 simplified 'Zen 4C' cores in a similar density-improving arrangement to address the same market segments, arrive a year earlier in 2023.

The Long Road Ahead

While it's clear that Intel has several tough years ahead as it works to rebuild, Gelsinger did point to leadership changes that will help accelerate the turnaround. 

"Seventy percent of the leaders, or the leaders minus one, are new to the company or new to the role that they're in. So it's been a pretty dramatic rebuilding of the leadership team." Gelsinger noted. He also announced that the company had promoted Shlomit Weiss to senior vice president and Co-GM of the Design Engineering Group.

Gelsinger also plans to continue focusing on the company's core competency: Logic chips. That means he will stay open to exiting more businesses, much like Intel recently decided to wind down its Optane business. 

"Obviously, Optane. And man, I sort of joke that Intel exited the memory business 40 years ago, and they've just kept making that decision. Right? Well, I'm gonna close that frickin' door, and we're gonna stay out of the memory business and really get a cleanliness of our business strategy around logic," Gelsinger said. "You know, we have a few more that we'll likely exit as we continue to prune and get more focused."

Intel revealed more new details about the 3D Foveros chip design it will use for its Meteor Lake, Arrow Lake, and Lunar Lake chips today as a teaser to the company's presentation at Hot Chips 34, a semiconductor industry conference that sees the titans of tech sharing the architectural details of their new processors. Intel CEO Pat Gelsinger will keynote the event, and the company also has four technical presentations, including the consumer 'Lake' processors we'll discuss here and Ponte Vecchio GPUs, FPGAs, and the Xeon D processors. 

First and foremost, there have been recent rumors that Intel's Meteor Lake will be late to market due to Intel switching from the TSMC 3nm node to the 5nm node for its GPU tile/chiplet. While Intel still isn't sharing information about which specific node it will use for the GPU, company representatives say the planned node for the GPU tile has not changed, and the processor is on track for an on-time release in 2023. Notably, Intel will only manufacture one of the four tiles used to construct its Meteor Lake chips — TSMC will produce the other three. Industry sources indicate the GPU tile is TSMC N5 (5nm).

The first image in the above album is a new diagram that Intel shared of its Meteor Lake processors. We also added the following slides from our Intel 4 process node coverage. The new image has a few new details — Intel says this diagram is of a mobile processor that will ship to the market with six performance cores and two clusters of efficiency cores. Intel hasn't confirmed, but these are thought to feature the Redwood Cove and Crestmont architectures, respectively. Meteor Lake and Arrow Lake chips will scale to meet the needs of the mobile and desktop PC market, whereas Lunar Lake will serve the mobile 15W and under market. 

Packaging and interconnect advancements are rapidly changing the face of modern processors. Both are now just as important as the underlying process node technology — and arguably more important in some facets.

Many of Intel's disclosures today center around its 3D Foveros packaging tech that it will use as a bedrock for its Meteor Lake, Arrow Lake, and Lunar Lake processors for the consumer market. This technology allows Intel to stack chiplets vertically atop one unifying base die with a Foveros interconnect. Intel also uses Foveros for its Ponte Vecchio and Rialto Bridge GPUs and the Agilex FPGAs, so this is a foundational technology for several of the company's next-gen products.

Intel first brought 3D Foveros to market in its low-volume Lakefield processors, but the four-tile Meteor Lake and nearly 50-tile Ponte Vecchio are the company's first high-volume chip production with the technology. After Arrow Lake, Intel will transition to the new UCIe interconnect, thus tapping into the forming ecosystem of chiplets that use a standardized interface.

Intel revealed that it will place the four Meteor Lake chiplets (called 'tiles' in Intel parlance) on top of a passive Foveros interposer/base tile. The chiplets and interposer are wired together with TSV connections, and the interposer doesn't have any logic. The Meteor Lake base tile is different than the one found in Lakefield, which served as an SoC of sorts. The 3D Foveros packaging tech also supports active interposers. Intel says it manufactures the Foveros interposer with its low-cost and low-power-optimized 22FFL process (the same as Lakefield). Intel also has a newer 'Intel 16' variant of this node for its foundry services, but it isn't clear which version Intel will use for the Meteor Lake base tile.

Intel will mount the compute tile, which uses the Intel 4 process (more here), the I/O tile, the SoC tile, and the graphics tile (tGPU) atop this interposer. All of these units are Intel-designed and feature Intel architectures, but external foundry TSMC will manufacture the I/O, SoC, and GPU tiles. That means Intel will manufacture only the CPU and Foveros tiles.

Industry sources tell us that the I/O die and SoC are fabbed on TSMC N6, while the tGPU uses TSMC N5. (Notably, Intel calls the I/O tile an 'I/O Expander,' hence the IOE moniker.)

Foveros uses a 36-micron bump pitch (a critical measurement of interconnect density), an improvement over the 55-micron bump pitch it used with Lakefield. The Foveros roadmap includes 25- and 18-micron pitches with future designs. In the future, Intel says it could theoretically even use hybrid bonding interconnects (HBI) to reach 1-micron bump pitches. 

Cost has been one of the overriding concerns with exotic 3D packaging, and Foveros will be Intel's first foray into high-volume manufacturing with its leading-edge packaging tech. However, Intel says that chips produced with 3D Foveros packaging will be extremely price-competitive with standard monolithic (single-die) chip designs — and perhaps even less expensive in some cases. 

Intel designed the Foveros die to be as low-cost as possible and still deliver on the company's electrical and performance goals — it's the cheapest die on the Meteor Lake package by orders of magnitude. Intel isn't sharing speeds and feeds for the Foveros interconnect/base tile yet, but says the interfaces can run at 'multiple GHz' in the passive configuration (this statement also heavily implies that Intel has active versions of the interposer already in development). As such, Foveros doesn't incur any bandwidth or latency constraints that require design tradeoffs. Intel also expects the design to scale well in both performance and cost, meaning it can make either value-optimized designs or performance-oriented variants for other segments.

We see the real savings when we zoom out to the bigger picture. Leading-edge nodes are becoming exponentially more expensive per transistor as the industry progresses to smaller nodes, especially with monolithic designs, due to yield concerns. Additionally, designing new IP blocks, like I/O interfaces, for smaller nodes doesn't provide as much of a payoff for the investment. Therefore, re-using non-critical tiles/chiplets on 'good enough' legacy nodes saves time, cost, and developmental resources, not to mention simplifying the testing process.

For a monolithic die, Intel has to serially test the different chip elements, like the memory or PCIe interfaces, which can be a time-consuming process. In contrast, Intel can test chiplets concurrently to save time. Foveros also affords advantages in designing chips for certain TDP ranges, as the different chiplets can be tailored for the needs of the design.

If you think most of these points sound very familiar, you're right — these are the same factors that propelled AMD down the chiplet path back in 2017. AMD wasn't the first to use a chiplet-based design, but it was the first to design a modern mass-produced chip using the design philosophy, so Intel is a bit late to the tech. However, Intel's initial foray with 3D packaging tech is far more complex than AMD's organic interposer-based designs, which will have both advantages and disadvantages. The proof will be in the final silicon, which Intel says is on track for a 2023 launch. Arrow Lake and Lunar Lake will follow in 2024. 

Here's the overview of the topics that Intel will cover this week at Hot Chips 34. We'll have more in-depth coverage as the actual presentations occur, so you can expect an update to this article soon. Stay tuned. 

It looks like yesterday's TrendForce report about Intel delaying orders for Meteor Lake's GPU tile at TSMC has attracted quite some attention from the two companies as both decided to comment on it. Both comments indicate that there are no changes to their plans. 

"TSMC does not comment on the business of individual customers," the company said in a statement published by Economic Daily. "The company's capacity expansion project is proceeding as planned." 

Meanwhile, Intel reiterated yesterday that its 14th Generation Core 'Meteor Lake' processors will be available in 2023, as planned. 

"In 2023, we will deliver our first disaggregated CPU built on Intel 4, Meteor Lake, which is showing good health in both our and our customers' labs," said Pat Gelsinger, Intel CEO, in the company's Q2 2022 earnings call last week. 

TrendForce yesterday issued a report claiming that Intel had decided to postpone the start of Meteor Lake's GPU tile production on TSMC's N3 node from late 2022 to 'late 2023,' which allegedly caused TSMC to revisit its N3 capacity investment plans.  

Because Meteor Lake is supposed to hit the market in fall 2023 (or even holiday season 2023), it hardly made a lot of sense for Intel to start high volume manufacturing (HVM) of MTL's GPU tile this year and have it delivered early in 2023. In fact, it was not genuinely beneficial from a financial accountability point of view. Therefore, moving the GPU tile HVM start to July 2023 is an entirely logical decision that should not affect the availability of Meteor Lake processors.  

As for TSMC, it has a bunch of customers planning to use N3, N3E, N3P and other N3 nodes in the 2023 to 2024 timeframe. The list includes not only Apple (TSMC's biggest client) and Intel in 2023 but also AMD, MediaTek, and Qualcomm, just to name a few, in 2024. Therefore, slowing down N3-capable capacity introduction did not make sense for TSMC, even if some of Intel's plans have changed.

Intel’s CEO Pat Gelsinger has tacitly admitted that he might have put execution on the backburner over recent months. During the company's earnings call last night, Gelsinger said that he will 'spend a little bit less time in Washington' to help improve the company's execution, a reference to his recent lobbying efforts for the US CHIPS act — a telling statement after the company's recent calamitous earning results.

Regular readers will have seen clear evidence of the buoyant Gelsinger popping up all around the world, zigzagging across the globe, oftentimes traversing from the Far East to Europe and back to the US again in the space of a few days. He’s been wheeling and deal-making, perhaps distracting from the hands-on engineering-focused management that was previously his hallmark. In a statement provided in the wake of the grave results yesterday evening, Gelsinger has now pledged to cut down on the visits to Washington and spend more time laser-focused on the core business.

“So, we’re still working through that inventory of designs that were in process, a lot of work to do, a lot of rebuilding, and that’s where a lot of my attention is being focused on,” said Gelsinger of his plans for the way forward. “And maybe now that I spend a little bit less time in Washington, right, this is the focus for us as a team is getting that execution to be superb once again."

Gelsinger also took clear responsibility for the company's poor execution in his prepared statements, saying, "This quarter’s results were below the standards we have set for the company and our shareholders. We must and will do better. The sudden and rapid decline in economic activity was the largest driver, but the shortfall also reflects our own execution issues.[..]." (Emphasis added.)

Management is full of balances and compromises, and Gelsinger's statements suggest that the balance between politicking on behalf of Intel many miles from its high-tech facilities and leading from the shop floor probably hasn’t been optimal.

One could argue that Gelsinger’s travels have been necessary and very successful, and no one else from the company could have achieved the deals, subsidies, and partnerships that he has secured in a relatively short time. Gelsinger might be able to stay closer to home now, with the $76 billion US Chips act passed by the senate, similar funding achievements in the EU, and significant deals recently hammered out with MediaTek and TSMC, among others.

Intel’s latest set of financials was extraordinary for many of the wrong reasons: You have probably read our multi-faceted coverage already; about the headlining $500M loss, the 17% QoQ sales decline, and the precipitous fall to a 37% gross margin. Moreover, the final nails were put in the Optane memory business coffin – as this once hopeful technological thrust became a $559M inventory write-off.

We can only hope that Gelsinger’s pared-back travel schedule will be a big positive for the iconic PC chipmaker. Realistically though, the current macroeconomic wave is likely too much for a mere refocus of management strategy to successfully navigate — it will take a multi-pronged approach. We also need a recovery in consumer and business confidence, which could return very quickly if governments find a way out of the energy crisis and the Ukraine war comes to an end.

Intel on Thursday posted its first loss in decades as sales of its processors for client PCs, and data centers dropped sharply in the second quarter because of what Intel calls "a rapid decline in economic activity" caused by inflation, geopolitical tensions, and the ongoing Russia-Ukraine war.

Intel's revenue in Q2 2022 totaled $15.3 billion, a 17% decline year-over-year (YoY) and a 22% drop sequentially. In addition, the company's gross margin fell 36.5% from 57.1% in the same quarter a year ago. The company also posted a loss of $0.5 billion, the company's first loss in decades. While Intel's quarterly loss looks shocking, it should be noted that the company had to make inventory reserves for upcoming product launches, which generated losses in accordance with GAAP.

"This quarter's results were below the standards we have set for the company and our shareholders," said Pat Gelsinger, Intel CEO. "We must and will do better. The sudden and rapid decline in economic activity was the largest driver, but the shortfall also reflects our own execution issues."

Shipments of Core and Xeon Decline for First Time in Years

Intel's main cash cow — the Client Computing Group (CCG) — earned $7.7 billion in revenue in Q2 2022, down 25% from the same quarter a year ago. There are several reasons why Intel's client CPU and chipsets sales dropped so significantly. Firstly, demand for PCs was down in Q2 both sequentially and YoY. Secondly, because PC OEM makers are uncertain about demand in the coming quarters, they buy fewer CPUs than they consume, prefer to use their existing stocks, and drain existing inventory. It means that as soon as their stashes drain, they will increase their purchases from Intel.

Intel's Datacenter and AI Group (DCAI) sales of datacenter hardware declined to $4.6 billion in Q2 2022, down from $5.5 billion in Q2 2021, a drop of 16% YoY. Intel mentioned three reasons for the decline: competitive pressure from AMD, mix-driven average selling price (ASP) decrease (which might be caused by the necessity to adjust prices or tailor offerings to respond to competition), and OEM inventory reductions.

The revenue of Intel's Network and Edge Group (NEX) was perhaps a ray of light in the company's otherwise gloomy earnings report as the business unit managed to increase its revenue to $2.3 billion, up 11% year-over-year. Intel says that NEX's good results were driven by solid sales of its 5G (which probably means compute solutions for infrastructure equipment) and Ethernet products. Meanwhile, Intel's NEX also began shipments of its codenamed Mount Evans 200Gb SoC IPU and started to ramp up shipments of the latest Xeon D-1700/2700 parts based on the Ice Lake-D microarchitecture.

One of Intel's most ambitious projects in recent years is indisputably its client and data center GPU endeavor led by Raja Koduri. But entering the GPU market is expensive, which is why the company's Accelerated Computing Systems and Graphics Group (AXG) lost a whopping $507 million in Q2 2022 on sales of $186 million (up from $177 million in Q2 2021) as Intel is ramping up shipments of Arc Alchemist, shipping its Blockscale mining ASIC, and is beginning to ship its supercomputing products. The loss is generated primarily by additional investments in R&D and prototyping and inventory reserves for the high-volume Arc launch in Q3.

The Intel Foundry Services has landed orders from Qualcomm and Mediatek, two major fabless developers of chips that sell hundreds of millions of chips a year. But IFS yet has to become a big business for the blue giant. As a result, Intel's foundry business unit sales dropped to $122 million, and it lost $155 million in Q2 2022. In addition, Intel says that demand for its photomask writing tools declined in the second quarter, yet the company had to continue investing in IFS.

Another bright spot in Intel's Q2 financial report is Mobileye's revenue of $460 million, a 40% increase year-over-year driven by high demand for EyeQ products. In addition, the unit's operating income totaled $190 million, which is a 43% increase YoY.

Gloomy Expectations

Intel now projects its Q3 2022 revenue to be in the range between $15 billion and $16 billion, down sharply from $19.2 billion in the same quarter a year ago. In addition, the company's gross margins are expected to be 43.2%, a drop from 56% in Q3 2021 but a notable increase from Q2 2022. 

Due to catastrophic Q2 results and macroeconomic uncertainties, Intel expects its 2022 revenue to total $65 billion – $68 billion, down 9% - 13% YoY and $8 billion – $11 billion lower than initially expected. As a result, the chip giant anticipates its 2022 margin totaling 44.8%.

"We are being responsive to changing business conditions, working closely with our customers while remaining laser-focused on our strategy and long-term opportunities," said Gelsinger. "We are embracing this challenging environment to accelerate our transformation."

In a bid to respond to market weakness, Intel plans to reduce its near-term spending as well as review production cost-cutting measures. In particular, the company is reducing its 2022 CapEx budget from $27 billion to $23 billion. Meanwhile, Intel will not sacrifice its long-term spending and big projects like new fabs in the U.S. and Europe.

"We are taking necessary actions to manage through the current environment, including accelerating the deployment of our smart capital strategy, while reiterating our prior full-year adjusted free cash flow guidance and returning gross margins to our target range by the fourth quarter," said David Zinsner, Intel CFO. "We remain fully committed to our business strategy, the long-term financial model communicated at our investor meeting, and a strong and growing dividend."

GlobalFoundries and Intel may have to delay deployment of new fabs if the U.S. Senate fails to pass government semiconductor production subsidy bill in the coming weeks. While the buildings themselves will likely be constructed, they will not be equipped with manufacturing tools without subsidies from the U.S. 

"To do it sooner rather than later, we would need government co-investment with us," Thomas Caulfield, chief executive of GlobalFoundries, said in an interview with Reuters this week. "We have good free cash flow generation, but we'd have to build up the balance sheet to go make those investments." 

Meanwhile the CHIPS act has passed the first procedural barrier in the U.S. Senate on Tuesday, which cleared the road for its broader discussion and eventual approval, reports SeekingAlpha. 

GlobalFoundries last year allocated $1 billion on expanding production capacity of its Fab 8 in Malta, New York. The company said it would build a brand new fab in the state, in a bid to further enhance its manufacturing capability. However, to build that fab, GlobalFoundries needs subsidies from the government to quickly construct and equip the facility. Without support, the foundry that builds chips used by the military and other organizations crucial for the U.S. national security and economy, will have to slowdown the project. 

Thomas Caulfield is not the first U.S. semiconductor company CEO to warn the U.S. legislators about possible delays of new fab projects because the CHIPS act proposed in early 2021 has still not become the law. About a week ago Pat Gelsinger, chief executive of Intel, said that his company might build a new mega site in Europe instead of Ohio if the U.S. fails to pass appropriate semiconductor production subsidy legislations. 

In a bid to be competitive with South Korea and Taiwan-based producers of chips, companies like Intel and GlobalFoundries have to gain capacity in the U.S. But building fabs in the USA is expensive, so they badly need funding from the government, but the latter cannot act before legislators pass the appropriate laws. 

Under the CHIPS act, the U.S. will provide $52 billion in subsidies, grants, tax credits, and various incentives to chipmakers that produce microelectronics in the USA. For the U.S., it is important to produce more chips locally as it can boost the economy and is a matter of national security since modern high-tech weapons use a variety of microelectronics components.  

For companies like Intel, GlobalFoundries, TSMC, and Samsung Foundry the U.S. government subsidies are crucial to build their new fabs in the country rather sooner than later. Without support from federal and local authorities, the said companies will not be able to fund the projects as quickly as they would hope. Modern advanced fabs cost well over $10 billion dollars even for one phase. Meanwhile, Intel has said that its mega site in Ohio — which is set to house both semiconductor fabs and advanced packaging facilities — will require investments of $100 billion to be fully built up.

Intel has made it clear that its expansion plans in the US partially hinge on government subsidies. Speaking live with the Washington Post earlier this week, Intel CEO Pat Gelsinger made it clear that if the US Innovation and Competition Act (or USICA) isn't approved on the floor of Congress, the company will be seeking greener pastures across the Atlantic - namely in Europe, where the EU has been aggressively moving to increase local leading-edge chip manufacturing.

"We've made super clear to McConnell, to the Democrats, to the Republicans, that if this doesn't pass, I will change my plans," Gelsinger said. "The Europeans have moved forward very aggressively, and they're ready to give us the incentives that allow us to move forward," he said, likely referring to the Silicon Junction initiative, which saw the EU open up its strings to a cool $43 billion in support for local manufacturing capabilities.

The measure is currently languishing on the Congress floor due to differences in opinion between Republicans and Democrats. The USICA bill would allocate up to $52 billion in incentives for semiconductor initiatives on US soil, and saw the creation of the Semiconductors in America Coalition (SIAC) lobbying group.

The point of contention mostly lies in that Democrats could attempt to approve it as part of a broader reconciliation package that would allow Medicare to negotiate prices with drug manufacturers, which would help control prescription drug prices while putting a cap on insulin prices.

Senate Minority Leader Mitch McConnell, in a tweet, didn't mince words on whether USICA would pass on the floor:

Following the turmoil in approving the bill, Intel has already (and indefinitely) delayed the groundbreaking ceremony for its planned Ohio fab from its planned July 22nd date.

Besides creating 3,000 Intel jobs, 7,000 construction jobs, and tens of thousands of indirect local long-term jobs, Intel had committed to investing $100 million in partnerships with local educational organizations.

Intel's plan for Ohio involves a Mega Site, whose investment is expected to reach a fat $100 billion. Intel's timelines indicate that the company would be looking to manufacture chips within its Angstrom era of electronics, namely under the planned Intel 25A and Intel 18A nodes (which will be among the most advanced manufacturing technologies in 2025).

The fast-approaching deadline for USICA to successfully cross the Congress floor - which enters its recess in August - prompted Secretary of Commerce Gina Raimondo to lead a classified briefing with senators on Wednesday. The purpose of the meeting: to stress the dire need to pass the $52 billion-worth bill in a geopolitical environment where China grows increasingly relevant in the high-tech space.

“The message is, ‘Time’s up,’” Secretary of Commerce Gina Raimondo told CNN after the briefing. “It’s time to make it happen."

Intel CEO Pat Gelsinger has visited Seoul to speak with several top Samsung executives, reports the Korea Herald. The discussions, confirmed by Samsung, have sparked talk of possible new collaborative plans between Intel and the Korean electronics giant.

After attending the 2022 World Economic Forum in Davos, Switzerland, Gelsinger flew to South Korea and met up with Samsung executives. Around the table were Samsung Electronics Vice Chairman Lee Jae-yong, co-CEO and chip business boss Kyung Kye-hyun, head of Samsung Mobile Roh Tae-moon, as well as other high-ranking Samsung executives.

The Korea Herald doesn't have any official statement or executive quotes regarding the meeting. However, it says the meet up raises expectations of collaboration between these two chip making goliaths, as the race for next generation process technology intensifies. As a Korean publication it isn't surprising to see the Herald suggest that Samsung is ahead of Intel by several key semiconductor manufacturing metrics. It even mentions Intel's famous stumble over 10nm and difficulty in breaking this final double digit nanometer barrier. There is some truth about that statement though, as we shouldn't forget the current (Alder Lake) 'Intel 7' process is a rebrand of Intel 10nm Enhanced SuperFin.

The source mentions previous Intel / Samsung collaboration as further 'evidence' of collaborative talks being held. While we can't provide any definitive reason or confirm the Korea Herald's assertions, Gelsinger was definitely there for business, and not to talk about new TVs or smartphones. Ideas about collaborative works involving Intel processors plus Samsung memory chips and memory interfaces were floated in the source article, but may be nothing more than reporter brain storming.

Intel already has some agreements with TSMC, the world's largest contract chip manufacturer and rival to both Intel and Samsung in this regard. As recently as April, Gelsinger was in Taiwan on a quest to secure more of TSMC's sub-7nm production capacity. No specifics were revealed at the time of the visit, with regard to the parts Intel wants more of.

Some light is cast upon Intel's dealings past, recent and future by its latest leadership roadmap. Intel will be making use of 'External N3' for one of the tiles in its Meteor Lake and Arrow Lake chips. N3 is TSMC's nomenclature for its 3nm process technology. At the same time, Intel is going to make a significant upgrade of its own, to Intel 4 (previously called Intel 7nm, enhanced with EUV lithography).

On the topic of Meteor Lake and Arrow Lake, we recently reported that these chips will be among the first to use Intel Foveros 3D technology. We should hear much more about these processors from Intel in August when there is a presentation about them scheduled at Hot Chips 34. Meteor Lake is expected to arrive in 2023 and is the codename for the 14th gen Intel Core processors.

Looking at Intel Lunar Lake and beyond we see that Intel's roadmap doesn't give any hint about the external foundry technology which will accompany its own 18A CPU tiles. This could be where Samsung steps in, ready for 2024. Alternatively it is possible it has won some orders prior to Lunar Lake.

Around seven years ago Intel began a painful process of mass layoffs. During the process, which started in 2015 and ran until 2016, 13,000 employees were dismissed. Brian Krzanich was CEO at the time, and as well as being instrumental to this layoff strategy, he rubber-stamped a controversial no re-hire policy. That policy has quietly been rescinded, reports The Oregonian.

The source indicates that Intel is in a personnel pickle and that the no re-hire policy has been unhelpful. The chipmaker currently needs thousands of staff across the US, with ambitious expansion plans still in motion – which will boost the demand for qualified and experienced staff even further.

Intel can't be sure that its rescinding of the no re-hire policy will be a great success, but in what is characterized as a national labor shortage, any potential help will be gratefully received. The no re-hire policy wasn't just frowned upon by those dismissed under Krzanich. Those who stayed behind will have been irked that when vacancies did arise, they couldn't be filled by trusted, experienced, old friends and former colleagues.

Now we are in mid-2022, with CEO Gelsinger now firmly in place, a leader with an established history of hiring his old workmates to some very senior positions. So it isn't surprising that the 2015/2016 no re-hire rule has been tossed aside.

In case you are wondering why the rule was drawn up in the first place, Krzanich is quoted as explaining "We're trying to build a different company. You don't orchestrate change by doing things the same way." On the surface that might sound logical, but people are very adaptable, and in 2022 Intel is finding it hard to hire qualified and experienced staff. Moreover, while Krzanich seemed to be somewhat PC-negative in his outlook, Gelsinger could be characterized as a PC, engineering and chipmaking evangelist.

In a statement received by The Oregonian, an Intel spokesperson is quoted as saying that "A number of years have passed since the 2015/2016 restructuring and those impacted may have new and additional skills that are valuable to Intel’s current business strategies." The spokesperson went on to make clear that most of the folk affected by the mass layoffs instigated seven years ago will be eligible to apply for current vacancies.

Of course, Intel can't progress and fill all the roles it needs to using old hands alone. Thus it has also announced new training programs. With these programs, it hopes to create a training and career path for high school and community college students who are interested in working in the chip industry.

This all comes as interesting news as chip rival Nvidia is said to be slowing its hiring activity due to rising inflation and the specter of a recession on the horizon. Whatever happens, it looks like Intel and Nvidia have different expectations for the coming months and years, or at the very least one is planning for the long term rather than the short term. It will be interesting to see where both companies are in a few years, and which strategy proves to be the smarter move for the chip-making giants. 

Intel CEO Pat Gelsinger expects that chip shortages will continue through to 2024.

On an interview with CNBC's TechCheck, Gelsinger suggested that a lack of availability of tools to manufacture chips  would drag out shortages, making it harder to reach high demand.  

"That’s part of the reason that we believe the overall semiconductor shortage will now drift into 2024, from our earlier estimates in 2023, just because the shortages have now hit equipment and some of those factory ramps will be more challenged,” Gelsinger said on the TV interview.

A number of analysts had suggested that the end is near for the shortage with expanded wafer production and slightly less demand in the marketplace.

While Intel is the sole American company the makes its own processors, it still is reliant on outsourcing. Gelsinger famously made the decision to produce certain "leadership CPU products" in 2023 through TSMC.

Intel is also expanding its business with its Foundry services, making chips for other companies.

"We feel like we're better positioned than most," Gelsinger said in a separate interview with Bloomberg. "The combination of our internal capacity as well as our leverage of foundries — we're just better positioned, and that's part of the structural advantage that Intel has."

The news comes as Intel forecasted a lighter second fiscal quarter than investors expected.  The company's latest earnings beat expectations, but tempered the market, as shares fell during after-hours trading when the announcement was made.

In April, ASML, the world's largest maker of lithography scanners, said it could only fulfill 60% of orders for the chipmaking tools this year.  The company's chief executive warned that it couldn't keep up with demand from the companies that need its tools.

Intel is currently working on building a new "mega site" for manufacturing in Ohio, but its first fab isn't expected to go online until 2025. The company is also expected to open a site in Germany and is investing in its plants in Arizona.

Back in September, AMD CEO Lisa Su suggested that the chip shortage would start to resolve itself in late 2022, painting a rosier picture of the market. It's unclear if AMD's thoughts on the situation have changed since.