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That is the whole purpose of internal foundry, no? Split design and manufacturing so they all can become best in class firms in their own right without any IDM baggage weighing down one or the other.
Why would investors attracted to putting capital into solid, predictable manufacturing want to see their money diluted in high risk volatile chip designs? Conglomerates like GE at least tried to have a general similarity to their portfolio.
Intel originally said they want to be second largest foundry (external customers) by the end of decade. this would mean ~10B in revenue per year external. Intel revised this to say they will be the second largest foundry next year. this is because Intel will count internal sales as foundry.
You should listen to the IDM2.0 thing from earlier this year again. The CFO said something to the tune of "while internal foundry technically makes them number 2 already, the goal is still for external foundry business to make them number 2 in it's own right.".
How they value internal is highly debatable. Intel has a plan for external but it is not shared with public. I published a model for intel external sales through 2028. I can review details of our model and Intel expectations and how the accounting will work but it is a long discussion.
Intel has said multiple times that internal BUs will pay market based pricing for technology and services.
As a side note why is internal foundry so poorly received? Folks will often talk about IFS as if it isn't a real foundry like TSMC or Samsung. From a revenue perspective that is certainly true. But why is Samsung "a real foundry" while IFS is "playing house"? I don't hear anyone saying "Samsung needs to spin out Samsung Foundry from Samsung electronics.". At least based on the messaging communicated it seems like TD-MSO-IFS will work no different than how Samsung operates their foundry (minus the memory of course).
Although that is is true, I have trouble accepting that. It seems to me that a competitor can step in one day against a design house. I would rather have the foundry and build the design house rather than the other way around.
Is it possible that the investors are afraid of the China situation? I am. If TSMC was located in the US, how much higher would TSMC be valued? Perhaps the speculators can change the fear variable and let us know the new valuation?
Although that is is true, I have trouble accepting that. It seems to me that a competitor can step in one day against a design house. I would rather have the foundry and build the design house rather than the other way around.
Is it possible that the investors are afraid of the China situation? I am. If TSMC was located in the US, how much higher would TSMC be valued? Perhaps the speculators can change the fear variable and let us know the new valuation?
I'm sure geopolitical risk is a big factor in TSMC's valuation. Nonetheless, Nvidia's net profit margin and revenue growth are both much higher than TSMC's. I too think chip foundries are a business with a higher barrier to entry than chip design, but a leader in chip design can command higher profit margins. I know this can seem illogical, but in the end in the finance world, only money counts.
I get it but man, talk about making enemies. Going to have a hell of a time fight Apple, TSMC and its entire ecosystem, Nvidia, AMD etc. Pat is putting them on the warpath against any and everyone which is brave but I don’t know how it will turn out well
