Intel's AI reboot is the future of US chipmaking

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US Commerce Secretary Gina Raimondo spoke at Intel's event today and compared the US government's current focus on reviving its chip industry to the space race of the 1960s. “The fact that we are so dependent on certain countries in Asia for the life-saving medical equipment, cars, every piece of technology we need, showed us that we have to get back to work making more chips,” Raimondo said.

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Intel's new foundry strategy will include breaking down the financials of the new unit to give investors a look at how that part of the business is performing. “We are not fixing a company; We are creating two vibrant new organizations,” Gelsinger said.

An Intel factory worker holds a wafer with 3D stacked Phovaros technology at the Intel fab in Hillsboro Oregon.

An Intel factory worker holds a wafer with 3D stacked Phovaros technology at an Intel fab in Hillsboro, Oregon.Photograph: Intel Corporation

Now Intel just needs more customers willing to trust it with the future of their business. Some chip industry insiders say the company's revised foundry plan is more likely to succeed than previous attempts to revive Intel's fortunes.

“Pat didn't really have an understanding of the foundry market before he joined,” says Dan Hutchison, a longtime chip industry analyst with Tech Insights. “There has been continuous improvement. The messaging is more focused, and they're picking up customers, which proves they're doing something right.

Gelsinger took over as CEO of Intel in 2021 when the company was heading into decline after several high-profile missteps. He promised an aggressive comeback plan that would include developing more competitive chips of his own, as well as gaining an engineering edge in manufacturing and offering them to other companies.

Hutchison says the company's biggest advantage may be that it can offer advanced packaging of newly carved chips into working components, guaranteed supply lines and other helpful chipmaking solutions that customers consider more secure in an uncertain world. Are. “Their biggest point of differentiation appears to be that they are a strategic alternative to TSMC,” he says.

Intel's decline has raised concerns in the US national security establishment because of the importance of computer chips and the extraordinary potential of AI. China's technology ambitions and the potentially vulnerable location of most of TSMC's factories in Taiwan have led to fears that America's access to the world's best chips could be cut off. In 2022, the US government passed the CHIPS Act, pledging $52 billion to reinvigorate domestic chip manufacturing and secure silicon supply lines. According to a report from Bloomberg, Intel is in line to receive $10 billion of that funding.

Intel clearly believes it could use even more government cash. On stage today, Gelsinger asked Secretary Raimondo if the US government might need a second CHIP Act. “I suspect that if we want to lead the world there has to be continued investment — whether you call it Chips Two or something else — there has to be continued investment,” Raimondo said.