Pat Gelsinger was delt a very challenging hand but I think he is playing it well thus far. The next year will be telling. Industry CAPEX will be slashed for sure to avoid a capacity glut.
I'm still eagerly waiting for Intel and AMD to go head-to-head using the same TSMC N3E process. Design versus design on the same process for the first time ever. That will be the ultimate test. AMD has the advantage since they have been with TSMC since N7 but Intel has a massive design force. Let the best chip win!
Intel Corporation (NASDAQ:NASDAQ:INTC) Q3 2022 Earnings Conference Call October 27, 2022 5:00 PM ETCompany ParticipantsJohn Pitzer - Corporate Vice President-Investor RelationsPatrick...
seekingalpha.com
PG: On Intel 4, we are progressing towards a high-volume manufacturing and will tape out the production stepping at Meteor Lake in Q4. The first stepping of Granite Rapids is out of the fab, yielding well with Intel 3 continuing to progress on schedule. Intel 4 and 3 are our first nodes deploying EUV and will represent a major step forward in terms of transistor performance per watt and density.
On Intel 20A and 18A, the first nodes to benefit from RibbonFET and PowerVia our first internal test chips, and those of a major potential foundry customer have taped out with silicon running in the fab. We continue to be on track to regain transistor performance and power performance leadership by 2025.
DAN: That customer is Qualcomm. This is a big win for IFS.
PG: IFS is a major beneficiary of our TD progress, and we are excited to welcome NVIDIA to the RAMP-C program, which enables both commercial foundry customers and the U.S. Department of Defense to take advantage of Intel's at scale investments in leading-edge technologies. Since Q2, IFS has expanded engagements to seven out of the 10 largest foundry customers, coupled with consistent pipeline growth to include 35 customer test chips. In addition, IFS increased qualified opportunities by $1 billion to over $7 billion in deal value, all before we welcome the
Tower team with the expected completion of the merger in Q1 '23.
(The RAMP-C program was created to facilitate the use of a U.S.-based commercial semiconductor foundry ecosystem to fabricate the assured leading-edge custom and integrated circuits and commercial products required for critical Department of Defense systems. Intel Foundry Services, Intel’s dedicated foundry business launched this year, will lead the work.)
DN: There have been whispers that the Tower acquisition had stalled so this is good news.
Interesting Q&As:
Timothy Arcuri
I had a question on the internal foundry. It seems sort of like the first step in basically splitting the company into an external foundry and a fabless company. Can you sort of play that out? Is that the idea? And sort of how does this create value? I guess, I mean, obviously, if you look at GlobalFoundries' market cap, that's like 30% of your market cap. But how does it play out functionally, how it creates value?
Patrick Gelsinger
Yes. When we definitely view that there are efficiencies for us to gain as we go through this internal foundry model, where we see numerous areas in the company that were not as rigorous as we need to be. In factory loading, where we make lots of change in factory loadings and we would run the factories more efficiently or stepping aren't accountable, right, through cost modeling back to the business units, and thus, driving the high-quality A0 stepping. And stepping changes being fully reflected internally and the cost of those will make us more efficient. Leveraging third-party IP more aggressively will make us more efficient.
And the combination of that is a big piece of why we're stepping to this internal foundry model, and we expect that we're going to start giving more financial transparency that way so that you can start to see the benefits in the margin stacking being realized of both being a product company as well as a fab foundry company. And that's what we're out to get with the structure that we're laying out.
That said, we think that this tight coupling of the IDM 2.0 model is a powerful value generator for us, at least the three areas. One, the technology benefits that we get to have a rapid pace of technology innovation innovation and co-optimization between product and process. The second is the cash flows and balance sheet benefits that we get by having these internal to be able to drive the large investments required in the manufacturing network. And third is in the supply chain efficiency and flexibility being able to balance across the foundry and business unit structure.
So these three areas for us are ones that we see that tight coupling bringing long-term meaningful value generation to the company and to our shareholders. But we're going to do it against the backdrop that we are going to be benchmarking ourselves against the best-in-class in each area and that transparency, right? We'll provide more visibility to you, our shareholders, but also drive our teams internally. And an engineering, manufacturing team when they see benchmark that you're holding up against them, it just unleashes energy into the future. And that's the excitement that we are working to create with this internal foundry model. And as we've launched it this quarter, we're already starting to see the roots of that permeate through our teams.
C.J. Muse
And one more question on your Intel foundry strategy. It makes perfect sense to me around the discipline and cost that you're looking to achieve here. But if I'm a business unit head, and you've been pretty clear that you're playing catch up five node migrations over the next four years. If I'm a business unit head over the next two years, why would I not outsource completely? So I guess what are the guardrails to ensure that you're keeping capacity internally until you achieve the goals that you set out for 2025?
Patrick Gelsinger
Yes. Maybe three different perspectives on that C.J. Obviously, most of the design decisions that are being made by my product teams now are '25, '26, '27 decisions when we're back to process leadership, right? And they're seeing that progress day to day. And just as I said, "Hey, if you want to design the best product, have the best transistor." So they're with the capability to look now at the Intel leadership process technologies as they make those decisions.
Also, secondly, as I described, this is a tight binding and we're going to maintain that tight binding of optimization and co-optimization for relationships that are decades old between our teams, by bringing in a new discipline to the boundary between them.
And the third answer is we already use external foundries. This is a process that's already pretty well established, and we're using a range of external foundries. Our design teams over the last five years or so have learned how to use external foundries. And the fact is they're interacting now with my internal foundry, many of those learnings on expectations of PDKs, design tools, IP libraries are driving the expectations for what is required to be a good internal foundry, which will make my internal foundry a better external foundry as well. So I see this as a very regenerative cycle as we unleash these energies. And ultimately, I'm the CEO across both, and we'll be making good decisions to hold both of them accountable even as we clarify the interfaces and the efficiencies between them.
Matthew Ramsay
Yes, John. One thing that piqued my interest, Pat, in your prepared script was -- I mean there's a lot of discussion of the five nodes in four years and halfway through that transition is 20A with RibbonFET or gate all around. So you guys are going to need to go through that jump. Your competition as well.
And you mentioned, I think, some tape-outs of your own stuff but also some tape-outs of potential external foundry customers on 20A that seemed, I don't know, from the language used, kind of meaningful. So if you could give us a status report there on sort of the gate all-around RibbonFET progress you see versus competition? And is this external customer really significant.
Patrick Gelsinger
Yes. Thank you. And on 20A and 18A, they go to RibbonFET, as you say. And Intel has driven every major transistor, right, in the volume production for the last 35 years. So the idea that we're the ones who are going to drive this major new transistor structure into production is something that we're pretty committed to be a driver for 20A, as you said, on track, on schedule. We expect 20A will primarily be an internal node, not one that we have a lot of external foundry customers for the external foundry chipset or tape-outs are largely associated with 18A.
And a very typical process for a foundry customer will be "give me a test chip of my circuits on your process." and that's exactly what we take out. The first one this quarter. We'll have several more in the pipeline. So now we're taking out not only our test chips for 18A, but our foundry customer test chips for 18A, and that's a pretty critical milestone when they see the results of the silicon for them making a volume decision for a foundry customer.
So we're exactly on the time line that I described earlier for those tape-outs and those decisions. So as they start to see the silicon results, which we think are going to be very promising we think that will be a key step to them making major foundry decisions. And overall, this just affirms our five nodes in four years. We're making the investments. We're seeing good progress to get back to process technology leadership, which for Intel is a tide that raises all boats in the company. It makes our products better. It establishes our new business areas, positions us in a very profound way for foundry [Technical Difficulty]
Economic environment. Macro, very challenged, but we're happy with the execution progress we made even though we're not happy with the reported results. And we know we have a lot more work to do there.
It was also thrilling to participate with the Mobileye IPO in a tough market with very good results. We're prepared for the economic headwinds. We're making the necessary adjustments structurally as well as through our cost model to go through them. And we remain fully committed to being a value generator for our shareholders for the long term as we execute our 2.0. We believe that, that will be a great result for our owners for the long term.
Daniel Nenni
Word on the street is that QCOM and Intel are working closely on 18A. This could be a huge win for IFS. Intel 20A will be another yield learning node like Intel 4, TSMC N3, and Samsung 3nm. Let's hope all goes well for GAA and it gives us the power, performance, and density advantages that FinFETs did, absolutely.
