Shulou(Shulou.com)11/24 Report--

On October 27, Intel announced its results for the third quarter of 2023, in which Intel's contract manufacturing service revenue reached $311 million, a year-on-year increase of four times and a month-on-month increase of 34%. Intel said this was mainly due to growth in packaging revenue and increased sales of IMS tools, and IMS is an industry leader in developing multi-beam mask writing tools needed for advanced EUV.

As an important part of Intel's "IDM 2.0" transformation strategy, the outstanding performance of Intel contract manufacturing services supports what Intel CEO Pat Kissinger said recently, "I still think 'IDM 2.0' is absolutely correct, no doubt." Shortly after taking office, in March 2021, Pat Kissinger proposed this strategy, which consists of three parts: strengthening Intel's global internal factory network for large-scale manufacturing, expanding the use of third-party contract manufacturing capacity and building a world-class contract manufacturing business.

"more and more effective"IDM 2.0" strategy

Pat Kissinger believes that technological changes have strengthened the effectiveness of "IDM 2.0". Intel put forward the concept of "core economy" (Siliconomy), that is, "the growing economy driven by chips and software". AI promotes the development of "core economy", which is based on chips, so Intel needs to continue to produce on a large scale for its product division and other customers.

On the other hand, diversified and customized computing requirements make the semiconductor industry moving towards a "Chiplet" era. Future chips will be integrated in advanced 3D architecture by core particles from different manufacturers and based on different process nodes. With advanced packaging technologies such as EMIB and Foveros, Pat Kissinger believes that Intel has a bright future in this field and can provide customers with packaged products.

In addition, from the type of chipmaker, Intel can only move forward to the goal of top large manufacturers because its size cannot be subdivided. Therefore, Intel must continue to seek breakthroughs in technology. Pat Kissinger said that in the semiconductor industry, technology and manufacturing scale are inextricably linked, and Intel needs to continue to innovate in the fab every day to lay the foundation for the next generation of processes and technologies.

Using "Internal OEM Mode" to improve the Executive ability of Manufacturing Department

Under the "IDM 2.0" strategy, in order to increase the production capacity of the manufacturing department and reduce costs, Intel has created an internal contract manufacturing model (internal foundry model) that serves both external contract manufacturing customers and Intel product departments. Under this model, the profit and loss of Intel's manufacturing department will be accounted for separately and will need to compete in performance and price, while Intel's product business units will be able to choose whether or not to cooperate with third-party contract manufacturers.

Pat Kissinger said that Intel's product department used to require the manufacturing department to carry out chip production, the cost is very high, but can not be calculated, harming the manufacturing efficiency. After adopting the internal contract manufacturing model, the product department will have to pay for film production, so it will become more careful not to send every design to the factory, but to ensure that the product design passes through careful verification. The internal contract manufacturing model has brought about a new discipline model that makes Intel factories operate more efficiently.

The internal contract manufacturing model also helps to increase customers' trust in Intel contract manufacturing services. Intel treats external contract manufacturing customers and internal business units equally, protecting intellectual property rights (IP) and secrets. Intel's manufacturing plants also provide customers with dedicated capacity.

The Competitiveness of system-level OEM

In the highly competitive wafer foundry industry, how does Intel foundry service stand out? Pat Kissinger said that unlike traditional wafer foundry services, Intel can provide customers with open and comprehensive system-level foundry (systems foundry) services composed of wafer manufacturing, packaging, core and software, and can give full play to its expertise in chip design and manufacturing to help customers build successful products.

Especially Intel's advanced packaging services, with the rise of AI and high-performance computing applications, many leading AI chip companies are interested in this. In the third quarter of 2023, Intel OEM added two new AI chip design customers in advanced packaging, while another six customers are in active negotiations, and several more are expected to cooperate with Intel by the end of the year. "as Intel rapidly increases production capacity, advanced packaging will help accelerate the development of Intel OEM services and increase the number of customers," Pat Kissinger said.

Significant advances in Intel foundry services in the third quarter of this year confirmed the differentiation advantages of "system-level foundry". An important customer who promised to adopt Intel 18A and Intel 3 and made an advance payment found that the chips designed and produced by Intel OEM Services performed well in terms of power consumption, performance and area efficiency. In addition, Intel also announced the signing of two high-performance computing customers that will adopt Intel 18A process nodes, and substantial progress has been made in the cooperation with the next important customer, and commercial contract negotiations are expected to be completed by the end of the year. In terms of contract manufacturing ecology, Intel has reached a strategic cooperation agreement with Synaptics to develop IP based on Intel 3 and Intel 18A process nodes for Intel's internal and external contract manufacturing customers.

In the IDM 2.0 blueprint, Intel hopes to become the world's second-largest wafer foundry by 2030, and it can be seen that the company has invested heavily in manufacturing since Pat Kissinger took office. From low-level technological innovation in the areas of manufacturing and packaging to increasing production capacity around the world, Intel is accumulating advantages in all directions and is firmly moving towards the goal of strengthening manufacturing leadership.

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