Comments abound on last week’s Intel news announcing the appointment of Pat Gelsinger as the company’s new chief executive officer, effective Feb. 15, 2021. The official press release is quick to underline that the announcement “is unrelated to Intel’s 2020 financial performance” and that “the company has made strong progress on its 7nm process technology”, implicitly dismissing the notion of a reaction to a problem. But all observers are obviously interpreting this sudden CEO change as a move aimed at recovering competitiveness after a lackluster period that was becoming worrisome for the investor community.
For example, EDACafe last week briefly reported about a letter sent to Intel by Third Point, complaining not only about Intel’s well-known delay in moving to the 7-nanometer node, but also about its loss of many talented employees, certain questionable acquisitions, and more. Observers unanimously express positive judgements on Gelsinger – see, for example, the article from Tirias Research’s Jim McGregor on EETimes. Gelsinger has an engineering background and spent thirty years of his career at Intel, which he left in 2009 to join EMC as President and COO. From 2012 to present, he served as CEO of virtualization leader VMware. More bio details about him can be found in this note to all Intel employees. So, Gelsinger sounds like a great choice; but what about his new strategy?
Pat Gelsinger. Credit: Intel
Staying IDM versus going fabless
Given the difficulties that Intel is currently experiencing in keeping pace with foundries, a key point that Gelsinger will need to address is the choice between retaining Intel’s IDM identity – in other words, keeping the fabs – or embracing the fabless model, which would basically mean outsourcing the manufacturing to TSMC. The obvious parallel is with what AMD did back in 2008-2009, when it sold its fabs to the entity that later became GlobalFoundries.
On this point, Robert Maire from Semiconductor Advisors wrote some interesting comments on SemiWiki. According to Maire, AMD’s example is not a good one: “We think that this is not a good comparison. AMD did not have the minimum critical mass needed to support a fab and all the R&D that goes along with it. Intel has the size, scope and market needed to support the associated spend. The basis of the problem is not economic as it was with AMD; it is an execution/technical problem that Intel has encountered.”
