Intel CEO announced the creation of Intel Foundry, which with Intel Products now becomes two symbiotic parts of Intel, and also announced a new partnership with Arm, which Intel said is now their most important.

Three years ago, Pat Gelsinger returned to his long-time home at Intel to take up the CEO role after a sojourn at VMware, and shortly after, the company announced its new strategic vision, including becoming a world class foundry. Last Thursday, Intel presented an update on that vision at its Direct Connect 2024 event. They proclaimed the achievement of their initial goals, by remaking Intel on a new organizational model and the creation of Intel Foundry. The company now consists of Intel Foundry and Intel products.

“When I came back to Intel three years ago, I had three goals,” Gelsinger said. “We were going to rebuild this iconic company. We were going to restore the critical place it has in the tech industry. And third, we were going to build western manufacturing at scale – resilient, sustainable, trusted supply chains.

“Here we are three years later,” Gelsinger continued. “Shortly after I came back, in March 2021, we shared a perspective. Intel Unleashed, on unleashing the future and of the opportunities we had ahead of us, and we shared these notions that we had for the fundamental rebuilding of Intel. We announced plans at that point to become a world class foundry. And when we rolled that strategy out, some were like YEAH, and others were like, yeah right. Then others were just ‘no way are they going to be able to pull this off.’  But today this vision becomes real.

Gelsinger then introduced Intel Foundry and explained what it was all about.

“Simply put, I’m announcing today Intel Foundry. This is a renaming of a new organizational model. We are not fixing one company. We are establishing two vibrant new organizations, Intel Foundry and Intel Products, working intimately together. Intel Foundry is both independent and dependent. Intel Products and Intel Foundry are both under the Intel banner.

“That begins today,” he stated.

Intel’s goal is to be the number two systems foundry globally by 2030, but their goals around AI are more ambitious than that.

“At Intel we are engaging in 100% of the AI TAM market,” Gelsinger said. “I want to manufacture every AI chip.”

Gelsinger also made some new chip announcements.

“We are today announcing 14A for the first time, venturing deeply into the Engstrom node, and are also announcing new capabilities that fill out that road map,” Gelsinger indicated. “We are also making an also announcement around our Intel 16 technology.

Significant funding for the expansion of the US chip making industry came from the U.S. CHIPS and Science Act in 2022.

“We’ve never done anything like this before, at least not for a long time,” said Gina Raimondo, U.S Secretary of Commerce. “You had to go back to the 1960s and the Space Race, with the public sector, the private sector and academia working together to spur innovation. After COVID, the vulnerabilities in our supply chain were on full view to the world. We were heavily dependent on a couple of Asian countries, and we had to get back to work making chips in America.

“We can’t and do not want to make every single thing in America,” Raimondo continued. “But we do need to have our semiconductor supply chain and have much more manufacturing in the United States. The goal isn’t to be self-sufficient, but we do need a self-propelling engine of innovation and production.”

Stuart Pann, senior vice president and general manager of Intel Foundry Services, then took the stage brandishing a copy of Chris Miller’s Chip War, in which he referred to Intel as having been the most important company of the last 50 years.

“In this open standards era, you have to have standards on the devices,” Pann said. “That’s why we are a systems company that is turning into a foundry company.”

Pann stated that the current state of reckoning and how what it means requires a major rethink of how chips are designed.

“We can no longer do designs at a monolithic level,” he said. “To do this requires a system on a chip. That requires great packaging.”

Producing a system foundry for AI requires continued adherence to Moore’s law and to the continued systems business that make up the foundry process, things that Intel learned in its Xeon manufacturing process.

“Substrate, memory, an Interconnect NiC card that can handle AI modelling, and  cooling, with version cooling being the only way to reduce massive cooling demand for these huge machines,” ,” Pann said..”This is why we believe we have a differentiated approach in the foundry marketplace. The only way we are going to get to this exponential scale is by taking all these elements and multiplying them.”

Partners will  be a key part of this process.

“We can’t do this alone,” Pann stressed. “We have to have partners. They have full stacks, open standards and reference designs. And we aren’t just going to do it with the folks of today. Intel Capital makes strategic investments in such companies that fit our model, like SIPHox and AyarLabs. That’s how we are going to capture companies large and small. But we have to start even earlier than that, We have to go to the Universities. So we are announcing our first two Intel 18A  partners, Michigan Engineering and Berkeley.”

There are 30 existing Intel foundry partners, with Pann saying that five were particularly important.

They are Arm, Ansys, Cadence, Siemens, and Synopsys.

“These are the Big Five – the folks you turn to when you are doing their designs,” Pann stated.

“This morning, we are announcing a new partnership with Arm,” he said. “We will make co-investments and we will do joint programs. Pann said they were already Intel’s most important partner, something he admitted sounded odd because most people don’t think of the two companies as close collaborators, but rather as competitors.

“This is brand new for us, and the reason is that 80% of wafers have an ARM device in them,” Pann said. “There is no way you can be in the foundry business without a partnership with Arm.”

Rene Haas, Arm’s CEO noted that conversations started not long after he took over as CEO.

“We decided that we needed to be part of that,” he said. “It’s great seeing the results so far. The guys have done a great job.”

Pann summed up the session’s conclusions for the audience.

“I hope you have seen the progress that we have made as a company, with a strong foundation of technology and innovation across multiple dimensions. I hope that you see we have this idea of a stable secure supply chain. I hope you see our idea of a systems foundry that allows us to create not just a system on a chip, but systems on chips. The only limitation to what you can do with AI is your imagination.”