Tuesday, January 18, 2022

Intel CEO Pat Gelsinger is all praise for rival TSMC

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Intel CEO Pat Gelsinger flew to Taiwan to negotiate with rival foundry TSMC about outsourcing more of Intel’s chip manufacturing to the company after calling Taiwan a geopolitically unstable location for manufacturing.

On the trip, Gelsinger’s tone shifted as he admitted that TSMC’s contract manufacturing model has largely enabled a thriving chip manufacturing and innovation ecosystem. He also stated that Intel would continue to invest in Taiwan, but emphasized the importance of balancing the global chip production chain.

“TSMC has unlocked the magic of silicon for us and others in the industry in so many ways,” said Gelsinger in a pre-recorded video (below). “What TSMC has done is spectacular. At the heart of much of this is innovation indigenization is Taiwan. It is nothing short of amazing what Taiwan has become in the last several decades.”

Taiwan is a very special place for Intel, and TSMC is a very particular foe. Intel is pursuing a new IDM 2.0 strategy in which it will produce chips for others, similar to TSMC, making other Taiwanese foundries its competitors. Taiwan, on the other hand, is critical for a company that outsources a portion of its product production and works with a variety of Taiwan-based OEMs, ODMs, and manufacturers.

As a result, Intel will continue to invest in Taiwan (and even China, despite geopolitical tensions between the United States and the People’s Republic of China) as long as it remains a significant high-tech development and manufacturing base. Intel already outsources more than 25% of its manufacturing to companies like TSMC.

Intel, on the other hand, as an IDM 2.0 company with a global semiconductor production network, will continue to emphasize the importance of an international supply chain with fabs spread across the globe. To a large extent, this is due to Intel’s difficulty competing against companies in Taiwan and South Korea, which receive significant government incentives and support when they build new fabs.

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“We, the semiconductor industry, need to find a global solution that satisfies the incredible demand for our technology,” said the head of Intel. “We must build factories faster, run them at higher yields, install more equipment, and do so in a way that balances the global supply chain for the future.”

Also Read:

Crypto miners extracting more mining speed out of NVIDIA GeForce RTX 3080 Ti LHR than what the company is offering

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Avatar of Nivedita Bangari
Nivedita Bangari
I am a software engineer by profession and technology is my love, learning and playing with new technologies is my passion.

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