2 weeks Ago By Paul Thurrott
Intel CEO Pat Gelsinger has met with the beleaguered chipmaker’s board of directors, and they’ve agreed on a way forward. The company also announced separately that AWS has chosen Intel’s Foundry to build its custom AI Fabric chip, a much-needed win in this otherwise difficult time, and that it will receive further funding through the CHIPS act. “The Board and I agreed that we have a lot of work ahead to drive greater efficiency, improve our profitability and enhance our market competitiveness,” , which occurred last week and not in late September as previously reported.
“To build on our progress, we plan to establish Intel Foundry as an independent subsidiary inside of Intel. This governance structure will complete the process we initiated earlier this year when we separated the P&L [profit and loss] and financial reporting for Intel Foundry and Intel Products.” Sign up for our new free newsletter to get three time-saving tips each Friday — get free copies of Paul Thurrott's Windows 11 and Windows 10 Field Guides (normally $9.
99) as a special welcome gift! This change will accomplish a few important goals, Gelsinger says. It will ensure that potential customers that compete with Intel in chip design don’t need to worry that Intel will somehow become privy to sensitive intellectual property. It means that this new company can pursue independent funding sources–including, presumably government subsidies and loans in the U.
S. and elsewhere. And it will help Intel and the foundry subsidiary optimize their respective business structures independently and according to the unique needs of each.
“A more focused and efficient Intel Foundry will further enhance collaboration with Intel Products,” Gelsinger explains of this division. “And our capabilities across design and manufacturing will remain a source of competitive differentiation and strength.” The Intel Foundry leadership will remain intact with no changes, and it will continue to report to Gelsinger.
But the Foundry will create an operating board of independent directors that will govern the subsidiary and support its focus on “driving greater transparency, optimization and accountability across the business.” Intel Products–Intel’s chip design business–will “remain a source of competitive differentiation and strength,” Gelsinger says. Gelsinger also stressed that Intel Products will continue to focus on its x86 chip architecture across client, edge and data center, and that it will expand to provide a broader range of custom chiplets and other chips to meet emerging customer needs.
It is also simplifying its non-core businesses–like Edge and Automotive, Integrated Photonics Solutions, and Software and Incubation–into other parts of Intel Products. Gelsinger had said that Intel’s streamlining efforts would result in a workforce reduction of 15,000 by the end of 2024; he reported today that it’s about halfway through that reduction, most of which involve voluntary early retirement. And he has some good news to share, too.
Intel is expanding its partnership with AWS, with the cloud computing giant choosing Intel Foundry to build its custom AI Fabric chip on its 18A manufacturing process. Intel Foundry will also build a custom Xeon chip for AWS on the Intel 3 process. “At AWS, we’re committed to delivering the most powerful and innovative cloud infrastructure to our customers,” .
“By co-developing next-generation AI fabric chips on Intel 18A, we continue our long-standing collaboration, dating back to 2006 when we launched the first Amazon EC2 instance featuring their chips. Our continued collaboration allows us to empower our joint customers with the ability to run any workload and unlock new AI capabilities.” AWS will spend $7.
8 billion to expand its data center operations in Ohio, building on the $10.3 billion it’s invested in the state–and, more to the point, in domestic chip making capacity–since 2015. The new chips will be manufactured at Intel’s Ohio-based facilities.
And Intel and AWS say they are exploring further ways in which Intel 18A and future nodes like Intel 18AP and Intel 14A can be brought to bear to bring future AWS designs to market. Additionally, Intel announced that the Biden-Harris administration has awarded it with up to $3 billion in direct funding under the CHIPS and Science Act for the Secure Enclave program. Under this program, Intel will create leading-edge semiconductors for the U.
S. government. “As the only American company that both designs and manufactures leading-edge logic chips, Intel will help secure the domestic chip supply chain and collaborate with the DoD to help enhance the resilience of U.
S. technological systems by advancing secure, cutting-edge solutions,” . Paul Thurrott is an award-winning technology journalist and blogger with 30 years of industry experience and the author of 30 books.
He is the owner of and the host of three tech podcasts: with Leo Laporte and Richard Campbell, , and with Brad Sams. He was formerly the senior technology analyst at Windows IT Pro and the creator of the SuperSite for Windows from 1999 to 2014 and the Major Domo of Thurrott.com while at BWW Media Group from 2015 to 2023.
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