Pat Gelsinger, who become Intel's CEO only back in February, has set out to reinvent the company in which he became its first CTO and youngest VP. His new IDM 2.0 strategy promises a lot which includes better chips for its customers, more fabrication capacity in Europe and American continents and also the opening up of its fabs for the manufacturing of third party chips even if they are using technology based on Intel's competitor's ARM and RISC-V. This aspect of the strategy also opens up avenues for automakers who are struggling with a shortage of chipsets.
In his first earnings call as CEO, Gelsinger, in an interview with Yahoo Business, said, "We expect that the auto sector overall becomes a much bigger partnership and customer opportunity for Intel as it becomes more autonomous, more assisted, and more EV," said Gelsinger whose return to Intel has been taken very positively by the industry. "Cars are becoming computers with rubber on them. It is an exciting category for us," an excited Intel CEO proclaimed.
Gelsinger reiterated the fact that the global chip supply shortage would be in play for at least 2 years, he committed that his company was doing everything to help mitigate that.
The formation of Intel Foundry Services allows Intel to open up its foundries for the manufacturing of chipsets for cars
Intel's star has faded as it has lost its manufacturing ascendency to TSMC and Samsung in the last 5 years. Gelsinger believes that Intel is on a path to remedying those issues and will achieve parity with its competitors in the next couple of years. However, in the meanwhile, he also said that Intel was well-positioned to serving the auto sector by opening up its fabs as automobiles didn't need the most advanced manufacturing node.
"We're looking- can we bring designs? Can we help their suppliers by bringing some of that capacity online? Because we don't have to build a new fab. We're reallocating some of our existing fab capabilities in the foundry services. And then longer-term- hey, products and areas like our Mobileye division are just killing it in the market," explained Gelsinger.
"We've had reach-outs and we've reached out you know, let's help there as quickly as possible because it's such an important piece of our economy. And they're going through such a disruptive, innovative period with autonomy and EV," Gelsinger added.
Most automakers are leveraging ARM-based chipsets, including Tesla which has its FSD chipset platform. Even Nvidia's autonomous driving chipsets are based on the ARM architecture. In fact, Nvidia is acquiring ARM, but this acquisition is facing stiff resistance and perhaps the UK and Chinese regulators may block this acquisition.
Intel's MobileEye division has been making great strides
However, these chipsets aren't developed on the most advanced computing node which is 5nm reserved only for smartphone and notebook chipsets where performance per watt is very critical. Additionally, these chipsets are manufactured by contract manufacturers like TSMC and Samsung.
Tesla's FSD chipset is based on Samsung's 14nm process while Nvidia's latest Atlan chips for cars are going to be manufactured on an older 16nm process.
Potentially, with Intel's new direction, it can become a manufacturing partner for any chip design company with whom it traditionally just competed. This means if Nvidia or Tesla or any company for that matter can get a contract manufacturer like TSMC, Samsung, Global Foundries, to make its chips because of the capacity constraints, now there is a new option in Intel.
Intel also doesn't need to worry about the fact that it doesn't have the most advanced technology as the auto sector doesn't need it. Intel's older technology in this regard can come to serve the auto industry with its new IDM 2.0 strategy with the formation of Intel Foundry Services under the leadership of Dr Randhir Thakur.
As a part of this strategy, Gelsinger has committed $20 billion to build three new foundries in the next 2-3 years. These facilities will be in the US and Europe. Arizona has already been earmarked as one of the venues for this.
In addition to this, Intel's Mobile Eye autonomous driving technology unit is already making some great strides reporting $377 million in revenue with a 48 per cent year-on-year improvement. It has announced it will be launching a driverless delivery service in 2023.
