Intel makes Qualcomm chips, aims to catch rivals by 2025

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July 26 (Reuters) – Intel Corp. (INTC.O) said Monday that its factories will start building chips for Qualcomm Inc (QCOM.O) and laid out a roadmap to expand its new foundry business to catch competitors like Taiwan Semiconductor Manufacturing Co., Ltd. 2330.TW) and Samsung Electronics Co Ltd (005930.KS) by 2025.

Amazon.com Inc (AMZN.O) will become another new customer for the foundry chip business, said Intel, which for decades has led the way in technology for manufacturing the smallest and fastest computing chips.

But Intel lost that result to TSMC and Samsung, whose manufacturing services have helped rival Intel Advanced Micro Devices Inc (AMD.O) and Nvidia Corp (NVDA.O) produce chips that outperform Intel. AMD and Nvidia design chips that are then manufactured by competing chip manufacturers, called foundries.

Intel said Monday it expects to regain its leadership by 2025 and described five groups of chip-making technologies it will roll out over the next four years.

The most advanced use is Intel’s first new design in a decade for transistors, the little switches that translate into numeric and zeros. Starting in 2025, a new generation of machines will also be tapped from Dutch ASML (ASML.AS) that uses so-called extreme ultraviolet lithography, which renders wafer designs on silicon a bit like printing an old-fashioned photograph.

“We’re putting out a lot of details on The Street to hold us accountable,” Intel CEO Pat Gelsinger told Reuters in an interview, referring to investors.

Intel also said it would change its naming scheme for its chip-making technology, using names like “Intel 7” that align with rival TSMC and Samsung technologies in the market.

In a world of chips where smaller is better, Intel previously used names referring to the size of features in “nanometres”. But over time, the names used by chip makers have become arbitrary terms, said Dan Hutcheson, CEO of VLSIresearch, an independent semiconductor forecasting company. This, he said, gives the false impression that Intel is less competitive.

Intel’s first major customers will be Qualcomm and Amazon. Qualcomm, which dominates mobile chips, will use what Intel calls the 20A chip manufacturing process, which will use new transistor technology to help reduce the amount of power the chip consumes.

Amazon, which is increasingly making its own data center chips for Amazon Web Services, has not yet used Intel’s chip-making technology but will use Intel’s packaging technology, the process of assembling chips and “chips” or “boxes”, often stacked in It is called a three-dimensional formation. Analysts say Intel excels at this encapsulation technology.

“There were many hours of deep and technical communication with these first two customers, and many other customers,” Gelsinger said.

Intel did not provide details on how much revenue or how much manufacturing the customer would win, though Gelsinger said during an event announcing the news that the Qualcomm deal involved a “key mobile platform” and it was involved “in a deep strategic way.” Qualcomm has a long history of using multiple foundry partners, sometimes even for the same chip.

The biggest question facing Intel is whether it can deliver on its technology promises after years of delays under former CEO Brian Krzanich. In recent weeks, Intel announced the delay of a new data center chip called Sapphire Rapids.

But David Kanter, an analyst at Real World Technologies, said Intel is becoming more cautious than it has been in the past. Part of the years of delay resulted from the “arrogance” of tackling multiple technical problems in a single technology generation.

This time around, Intel is rolling out five generations of technology in four years, tackling smaller sets of problems, and also saying it may not introduce new EUV technology through the upcoming “Intel 18A” process if it’s not ready.

“Intel will catch up, and advance in some dimensions, with TSMC over the next few years,” said analyst Kanter. “Intel already has people who spend all of their time researching how to deploy new materials and technology to boost their performance.”

Additional reporting by Stephen Nellis in San Francisco; Editing by David Gregorio

Our Standards: Thomson Reuters Trust Principles.

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