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Intel to Invest $7 billion in Advanced Malaysian Facility

Intel Foveros wafer
(Image credit: Intel)

Intel has sent out invitations for a new announcement that's taking place in Malaysia this coming Wednesday. According to Electronics Weekly, the announcement will take place in the Kuala Lumpur airport. The event will bring together Intel CEO Pat Gelsinger, Malaysia’s trade minister and the CEO of the Malaysian Development Authority for the announcement of a $7.1 billion investment from Intel on a new leading-edge Intel operated semiconductor packaging facility in Bayan Lepas, Penang.

Packaging technologies are now one of the enablers of leading edge silicon and help to produce some of the best CPUs that you can buy. Technologies such as Intel's Embedded Multi-Die Interconnect Bridge (EMIB) and its natural evolution, Foveros, or TSMC's hybrid bonding technique are indispensable steps towards denser, 2.5D or even 3D silicon integrations. These packaging technologies enable manufacturers to explore Multi-Chip-Module (MCM) accelerator designs, pairing mirrored or heterogeneous dies in a single chip.

The importance of these technologies in enabling leading semiconductor complexity and performance cannot be understated; they are what enable the world's most powerful accelerators - such as Intel's upcoming Ponte Vecchio HPC products - to be feasibly designed from a pure engineering perspective. Besides MCM designs, silicon bonding techniques also enable "simple" vertical scaling of electronics chips. AMD, for example, is soon launching a partially-updated Ryzen 5000 series line-up integrating TSMC's hybrid bonding under its (recently submitted for trademark) V-Cache branding.

The $7 billion investment to be announced in Malaysia comes after Intel had already committed $3.5 billion for expansion of its New Mexico, Rio Rancho facility - which specializes in Intel's Foveros and EMIB packaging technologies as well. These investments go to show the amount of liquidity that's required for the cutthroat semiconductor manufacturing business. It also highlights the difficulty of scaling production capacity in time with booming, unexpected demand that has surged, during the global pandemic. The investment in the Malaysian facilities is expected to allow Intel to not only properly service its next-generation HPC contracts, but might also serve in some capacity for its contract foundry aspirations as part of its IDM 2.0 strategy.

It's also worth mentioning that Intel is likely investing in its packaging technologies outside the U.S. as a way to insulate itself from the country's international relations and economic policies. The yet-ongoing trade-war with China has already had its impact on Intel's bottom-line and Chinese fab expansion projects. Intel's continued investment in manufacturing facilities outside the US also protects them from eventual actions of U.S. regulatory bodies - Intel just recently intervened with the U.S. International Trade Commission (USITC) in its plan to ban Optiplan, a specific semiconductor manufacturing component imported to Intel's U.S. facilities. Of course, added manufacturing and packaging capabilities in Taiwan would also bring Intel's manufacturing closer to the world's most important semiconductor materials source, China, allowing for a potential reduction in supply-chain expenses.