Intel to invest $20B for two Arizona fabrication plants, announces 7nm chips for 2023

Intel pauses stock buyback program in the midst of coronavirus pandemic.

The semiconductor industry continues to get more competitive as new players enter the space. Moreover, as Big Tech firms shift towards in-house chips, companies like Intel and AMD are looking for new ways to stay relevant. For Intel, that means making a significant investment into its manufacturing business.

The chipmaker announced during a press conference on Tuesday that it is committing $20 billion to build two new fabrication plants in Arizona. According to the company’s new CEO, Pat Gelsinger, the move is part of Intel’s IDM 2.0 strategy.

Meanwhile, Gelsinger also announced Intel’s plans for its first 7nm chip, which goes by the name Meteor Lake. The company plans to finalize the chip’s design later this year, but it won’t arrive until 2023. It’s worth noting that this date is more than a year after Intel originally suggested the 7nm chip would arrive.

All-In On Production

Intel is known for a wide variety of things. While its chip design stands out as arguably its biggest strength, manufacturing tends to be a weaker area for the tech giant. Moving forward, Intel seeks to change that narrative by investing heavily in its fabrication capabilities.

Gelsinger called the company’s IDM 2.0 an “elegant strategy” in a recent blog post. He also says, “Intel is the only company with the depth and breadth of software, silicon and platforms, packaging, and process with at-scale manufacturing customers can depend on for their next-generation innovations.”

Moving forward, Intel’s new Arizona fabrication plants will help it stay at the forefront of that space. The facilities will be used to produce both Intel chips and components for third-party buyers.

Meteor Lake Woes

As noted, the development of Intel’s Meteor Lake chips has been plagued by delays. The company attributes most of its struggles to delays that first occurred with its shift to a 10nm process. Those set off a domino effect of delays that have now pushed Meteor Lake back significantly.

Fortunately, Intel is working hard to ensure that production issues don’t hinder its innovation in the future. The company is in the midst of shifting to a new extreme ultraviolet lithography (EUV) approach and a redesigned production process. Its new Arizona plants should also help—although the impact won’t be apparent overnight.

With that in mind, Intel will still be working with third-party foundries to bring its first 7nm chips to life. That includes both Meteor Lake and its Granite Rapids chips for data center applications.

Meanwhile, Intel is also launching a new segment called Intel Foundry Services. The unit will operate independently. Gelsinger notes that this will help Intel honor its promises to its partners. Given the fact that it has struggled to meet its own internal deadlines, potential partners could have some concerns.

That isn’t stopping Intel from working with companies like Amazon, Cisco, IBM, and Microsoft. Gelsinger is even pursuing a partnership with Apple, although the details of it remain unknown.

It will be interesting to see how Intel’s new Foundry Services division impacts the company’s wider business.


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