“It's good news for the United States that Intel is doubling down on its manufacturing business,” says Saif Khan, a research fellow at Georgetown University’s Center for Security and Emerging Technology. “Chip manufacturing is a key source of US economic competitiveness and is also highly relevant to national security.”Khan, who studies the policy implications of chip manufacturing, says the concentration of chip production in Taiwan and South Korea over the past decade poses risk to the US and other economies. Supply shocks and geopolitical conflicts can cripple whole sectors of industry. “The situation is looking a little bit scary,” he says.The Semiconductor Industry Association, a US industry group, said in September that 75 percent of chips are now made in Asia. The US share of global chip manufacturing, which stood at 37 percent in 1990, has fallen to 12 percent. Both Intel and the US government want to claw some of that back.
Intel’s CEO, Pat Gelsinger , said on Tuesday that the company would spend $20 billion to build new chipmaking factories in Arizona, bolster its unit making chips for other firms, and collaborate with IBM on research into new chip technology.Gelsinger also confirmed rumors that Intel would outsource some manufacturing to TSMC but said the company would keep most chipmaking in house.
Manufacturing modern microchips is an incredible feat of engineering, with features shrunk to just a few billionths of a meter in size wringing more efficiency and computational power out of new designs.
Intel is currently making chips with features 10 nanometers in size. TSMC is making chips using 7- and 5-nanometer processes; by the time Intel is up to speed with 7-nanometer manufacturing, TSMC says it will be on to 3 nanometers.“It's a pretty deep hole for Intel,” says Linley Gwennap, president of the Linley Group, a chip industry analyst firm. “And it's not just about throwing money at the problem.”For Intel to regain a stronger position in chipmaking, Gwennap says, execution will be key, and the company will need to do more to regain its technological edge. He says the plan to collaborate with IBM on research into new chip designs and ways of packaging components together could prove the most important part of yesterday’s announcement. IBM has several research groups working on novel approaches to microprocessor design and manufacturing.
“I think it should help Intel do a better job of innovating in the next-generation technology,” he says. “And this is really what Intel needs.”
A decade ago, Intel sat atop the chipmaking world. But the company failed to anticipate crucial shifts in computing, from desktop machines to smartphones , and from general-purpose chips to specialized chips for artificial intelligence . Intel also made crucial miscalculations in manufacturing, delaying use of EUV and leaving its latest products several years behind the most advanced.
As Intel stumbled, other companies such as Arm , which designs mobile chips, and Nvidia , which sells specialized AI and graphics chips, have risen. Nvidia has announced plans to acquire Arm. Intel’s manufacturing mistakes, and the rise of custom chips, have also coincided with a shift in chipmaking to Asia, where Samsung and TSMC now make many of the world’s most advanced chips. Other Asian foundries such as UMC in Taiwan and SMIC in China make less advanced chips.