When Intel established the foundry department in early 2021, the cost of production nodes in major fabs has been pushed up to a very high level, and it will even increase. Relatively speaking, it also has enough strength to head-to-head with Samsung and TSMC.
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In fact, Intel stated from the beginning that it wanted to make the division a foundry on the same scale as Samsung and TSMC. It now appears that the company’s current plan is to make it the second-largest foundry by 2030.
“Our goal is to become the world’s second-largest foundry by the end of the decade, and (we) want to see fat foundry margins,” Randhir Thakur, president of Intel’s foundry services, told Nikkei Asia in an interview.
To be No. 2 in the global foundry market means Intel must beat Samsung Electronics. According to TrendForce, Samsung generated more than $20 billion in foundry revenue in 2021 and is expected to surpass this figure in 2022.
As of the first quarter of 2022, Samsung owns about 16.3% of global foundry revenue, lagging far behind market leader TSMC (53.6%), but significantly ahead of peers UMC (6.9%) and GlobalFoundries (5.9%).
In comparison, Intel’s IFS business unit has generated $576 million in revenue so far this year. Once the acquisition of Tower Semiconductor is completed in early 2023, Intel’s IFS division will add about $1.5 billion in annual revenue, so it can transform into the world’s 7th or 8th largest foundry, but still far behind Samsung in terms of revenue.
To become the world’s second-largest chip foundry manufacturer, Intel must adopt a multifaceted strategy, including the following:
- Develop cutting-edge process technology to compete with Samsung and TSMC in terms of power, performance, and area (PPA), while also considering yield and time-to-market.
- Leading production capacity for IFS customers.
- Sustain Tower Semiconductor’s operations and competitive position through innovation on proven technologies.
- The orders are mainly from the current foundry customers of TSMC and Samsung, and may also be able to steal some customers from GlobalFoundries and SMIC.