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Intel's 'Strategic Faux Pas' Could Be AMD's Gain Says Northland Capital Analyst

Daniel Nenni

Daniel Nenni

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“We believe that Intel's commitment to re-entry into the foundry market and maintain leading-edge manufacturing capacity makes it a low priority at TSMC,” the analyst wrote. On the other hand, Advanced Micro Devices is a preferred customer for Taiwan Semiconductor as all its leading-edge volume is produced at Taiwan Semiconductor, he noted. “INTC expansion into the foundry market will increase AMD as a priority for TSMC and INTC will be persona non grata,” Richard said. “For this reason, we expect AMD's market share momentum to continue,” he added.

Inner circle versus outer circle. Apple and AMD (TSMC exclusive) are inner circle. Qualcomm, Nvidia, and now Intel are outer circle. And if you look closely at the NDA required to get the leading edge PDKs your teams cannot work on both TSMC and Samsung PDKs. So you will need two IP and chip design teams in different locations etc...

finance.yahoo.com

Intel's 'Strategic Faux Pas' Could Be AMD's Gain Says Northland Capital Analyst

Advanced Micro Devices, Inc. (NASDAQ: AMD) could benefit from Intel Corporation’s (NASDAQ: INTC) “strategic faux pas” to try to reenter the foundry business, according to Northland Capital Markets. The Advanced Micro Devices Analyst: Gus Richard upgraded the rating for Advanced Micro Devices...
finance.yahoo.com finance.yahoo.com
 
Intel will be a foundry but will outsource their premium cpus to a foundry. What Intel is doing is a contradiction.
 
Daniel Nenni said:
“We believe that Intel's commitment to re-entry into the foundry market and maintain leading-edge manufacturing capacity makes it a low priority at TSMC,” the analyst wrote. On the other hand, Advanced Micro Devices is a preferred customer for Taiwan Semiconductor as all its leading-edge volume is produced at Taiwan Semiconductor, he noted. “INTC expansion into the foundry market will increase AMD as a priority for TSMC and INTC will be persona non grata,” Richard said. “For this reason, we expect AMD's market share momentum to continue,” he added.

Inner circle versus outer circle. Apple and AMD (TSMC exclusive) are inner circle. Qualcomm, Nvidia, and now Intel are outer circle. And if you look closely at the NDA required to get the leading edge PDKs your teams cannot work on both TSMC and Samsung PDKs. So you will need two IP and chip design teams in different locations etc...

finance.yahoo.com

Intel's 'Strategic Faux Pas' Could Be AMD's Gain Says Northland Capital Analyst

Advanced Micro Devices, Inc. (NASDAQ: AMD) could benefit from Intel Corporation’s (NASDAQ: INTC) “strategic faux pas” to try to reenter the foundry business, according to Northland Capital Markets. The Advanced Micro Devices Analyst: Gus Richard upgraded the rating for Advanced Micro Devices...
finance.yahoo.com finance.yahoo.com
Click to expand...

Does that mean under the new Intel's IDM 2.0 strategy, Intel will have at least one R&D team for each of their foundry partners (TSMC, Samsung, UMC, and Globalfoundries)? And they are not allowed to talk to each other?

Don't forget Intel also needs to have their own in-house R&D teams for Intel's 7nm, 5nm, 3D packaging, etc. Can they talk to or move back and forth with the Intel foundry partner teams mentioned above?

How does Intel maintain multiple firewalls and rules among these Intel teams in order to meet the PDK/NDA requirements?

Can they have a summer parking lot BBQ together?
 
Portland said:
Intel will be a foundry but will outsource their premium cpus to a foundry. What Intel is doing is a contradiction.
Click to expand...
I do not see the contradiction. The reason:
1. For intel CPU, they will use EUV for intel 7nm. 2 challenges here and need back-up solution to provide enough CPU for customers.
a. It is quite possible that intel will not get enough EUV:
There will be ~40 new tools/year from ASML in 2021/2022 and intel might need more than 40 in CPU manufacturing. There will be no surprise that tsmc and Samsung have
ordered more than half or even 2/3 of tools. It will be quite possible that intel will not get enough tools. And if wafer yield or EUV productivity do not meet target, then more
tools needed. To manage this risk, they need to plan outsourcing but adjust volume percentage. Besides, outsourcing validation takes time. You need plan ahead.
b. Capacity in outsourcing foundries is key factor of market share:
In competition, AMD, Qualcomm, nVidia .. do not have fab and the only reliable 5nm/3nm fab with enough effective capacity would be tsmc( and Samaung?) now. If you take
some capacity in tsmc, that means your competitors will get less capacity and less market share also. It would be smart move to outsource tsmc and control your market share
delicately.
This might explain why tsmc boost CapEx in 2021.
2. tsmc definitely know the situation of "Now You Love Me but Eventually You Will Try to Kill Me". There will be no surprise that tsmc ask long term commitment/contract before
they take the order from intel. Sounds familiar to life? Let's see who will win!
 
Intel outsourcing to a foundry at the same time selling themselves as a foundry I see as a contradiction.

The sense I have is that all there 7nm production will be at tsmc until 2023. So Intel is a foundry that doesn't make their top-level product.


Tsmc won. Intel is a bunch of "warlords" fighting their "civil war." One company there's unity and the other there isn't. It will be interesting to see what happens at 3, 2 nm or smaller and what remains of moore's law and what's new. There's already the "android" future narrative and that Microsoft will be lesser. The way I see it is which "warlords" adapt and which don't.
 
hist78 said:
Does that mean under the new Intel's IDM 2.0 strategy, Intel will have at least one R&D team for each of their foundry partners (TSMC, Samsung, UMC, and Globalfoundries)? And they are not allowed to talk to each other?

Don't forget Intel also needs to have their own in-house R&D teams for Intel's 7nm, 5nm, 3D packaging, etc. Can they talk to or move back and forth with the Intel foundry partner teams mentioned above?

How does Intel maintain multiple firewalls and rules among these Intel teams in order to meet the PDK/NDA requirements?

Can they have a summer parking lot BBQ together?
Click to expand...
LOL nailed it.
Intel ruined the beauty of semiconductor process integration with artificial boundaries.
 
Daniel Nenni said:
IFS Fact sheet from Intel:

Click to expand...

1616965578005.png

From that "Intel Foundry Service Fact Sheet", Intel's number doesn't seem right. According to the Counterpoint Technology Market Research, the foundry industry revenue has reached US$82 billion in 2020 already. It's much bigger than Intel's 2020 $65 ~ $70 billion estimate.

https://www.counterpointresearch.com/foundry-industry-revenue-growth-continue-2021/

With this 2020 $82 billion revenue in mind, in order to reach 2025 $100 billion total foundry market size described by Intel, the foundry industry annual growth rate can't be greater than 4%. It's far less than Intel's 20 ~ 25% CAGR forecast. Although it's not clear to me why Intel described this 2025 $100 billion global foundry industry revenue as "addressable market"? What's the fine print there? Am I missing something here?
 
Last edited:
I've done some calculation to analyze the revenue growth among the current top five foundries and the new Intel Foundry Services. Intel really needs lucks and perfect execution to secure its position in the foundry market.

1616967537505.png
 
hist78 said:
I've done some calculation to analyze the revenue growth among the current top five foundries and the new Intel Foundry Services. Intel really needs lucks and perfect execution to secure its position in the foundry market.

View attachment 417
Click to expand...
tsmc CEO CC Wei mentioned in last earnings call, project growth rate for tsmc will be 10~15%. FYI.
www.reuters.com

TSMC logs highest quarterly profit, sees record revenue and capital spending

Taiwan Semiconductor Manufacturing Co Ltd (TSMC) posted its best-ever quarterly profit and hiked revenue and capital spending estimates to record levels as it forecast "multiple years of growth opportunities".
www.reuters.com www.reuters.com
 
hskuo said:
tsmc CEO CC Wei mentioned in last earnings call, project growth rate for tsmc will be 10~15%. FYI.
www.reuters.com

TSMC logs highest quarterly profit, sees record revenue and capital spending

Taiwan Semiconductor Manufacturing Co Ltd (TSMC) posted its best-ever quarterly profit and hiked revenue and capital spending estimates to record levels as it forecast "multiple years of growth opportunities".
www.reuters.com www.reuters.com
Click to expand...
Thank you. Yes, I know that. I intentionally lowered the current top five foundries' future growth rates and intentionally set a very high five-year 30% annual growth rate for Intel. Under this incredible and rosy assumption I did on Intel, I don't believe if Intel really knows what they are getting into.

It seems to me foundry industry is a very challenging business for Intel to enter at this stage. Can Intel reach the goal they have set for themselves, whatever it is?
 
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