EDA-related updates make up most part of this week’s news roundup, with Cadence in particular introducing several new products. But first, a CHIPS Act update.

Samsung to get $6.4 billion under the US CHIPS and Science Act

The U.S. Department of Commerce and Samsung Electronics have signed a non-binding preliminary memorandum of terms to provide up to $6.4 billion in direct funding under the CHIPS and Science Act. Samsung is expected to invest more than $40 billion in the US in the coming years. The proposed investment would turn Samsung’s existing presence in Texas into a comprehensive ecosystem for the development and production of leading-edge chips, including two new leading-edge logic fabs, an R&D fab, and an advanced packaging facility in Taylor, as well as an expansion to their existing Austin facility.

Ansys’ AI-based virtual assistant

Ansys has released its AI-powered virtual assistant, AnsysGPT, built using ChatGPT technology. The virtual assistant provides responses to queries concerning Ansys products, relevant physics, and other complex engineering topics – including simulation setup. AnsysGPT captures knowledge from new public sources, including product documentation, product and engineering-related training documentation, FAQs, technical marketing materials, and public Ansys Learning Forum discussions.

Cadence’s new Palladium and Protium systems

Cadence has announced the new Palladium Z3 Emulation and Protium X3 FPGA Prototyping systems, offering more than a 2X increase in capacity and a 1.5X performance increase compared to previous-generation systems. The Palladium Z3 and Protium X3 systems scale from job sizes of 16 million gates up to 48 billion gates, so the largest SoCs can be tested as a whole rather than just partial models. The new systems are powered by the Nvidia BlueField DPU and Nvidia Quantum InfiniBand networking platforms. Congruency is maintained when transitioning between the two systems and transitioning from virtual to physical interfaces and vice versa. The Palladium Z3 system accelerates hardware verification, and through functional and interface congruency, models can be quickly brought up onto the Protium X3 system for accelerated software validation.

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Unsurprisingly, most news updates this week concern artificial intelligence in one way or another, with several new processor announcements. The so-called chip war is also in the news, with CHIPS Act updates and an analysis about Huawei.

US CHIPS Act updates: TSMC, Applied Materials

US CHIPS and Science Act’s recent updates include some applicant receiving the green-light and others getting a denial, reportedly due to “overwhelming demand”. The U.S. Department of Commerce and TSMC Arizona have signed a non-binding preliminary memorandum of terms to provide up to $6.6 billion to support TSMC’s investment of more than $65 billion in three greenfield leading-edge (2-nanometer) fabs in Phoenix, Arizona. On the other hand, the CHIPS Program Office has announced that it would not move forward with its third Notice of Funding Opportunity to construct, modernize, or expand commercial R&D facilities in the United States at this time. As a consequence, US-headquartered equipment maker Applied Materials may reportedly postpone or abandon its plans to build a $4 billion research and development facility in Silicon Valley.

Datacenter processor update: Google, Meta, Intel

Two hyperscalers have recently announced new homegrown processors. Google has unveiled the Axion Processors family, its first custom Arm-based CPUs designed for the data center. Based on Neoverse V2 CPU, the new devices will be available to Google Cloud customers later this year. According to the company, Axion processors deliver instances with up to 30% better performance than the fastest general-purpose Arm-based instances available in the cloud today, up to 50% better performance and up to 60% better energy-efficiency than comparable current-generation x86-based instances.

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The news about Intel Foundry takes center stage this week. Prior to summarizing the Intel announcement, here’s a short comment. Before Pat Gelsinger took office as the company’s CEO, some investors suggested Intel to adopt the fabless model, just like AMD in 2008. Gelsinger, instead, doubled down on manufacturing, announcing not just his intention to keep the fabs, but even to offer a foundry service. Intel’s decision to separate the financial reporting for the two parts of its business – foundry service VS chip sales – is probably an unavoidable step in the implementation of Gelsinger’s strategy, and will put it to the test. On the one hand, the new reporting structure will force Intel Products (the chip sales business) to correct its inefficiencies, as it will lose the convenience of easy access to internal manufacturing resources and seemingly costless design respins. On the other hand, Intel Foundry will be forced to quickly become competitive against TSMC, also because – at least officially – Intel Products will now be free to choose any other foundry instead. As of today, an unavoidable side effect of this decoupling is the public disclosure of Intel Foundry’s substantial losses. Will Intel Foundry deliver on its promise of reaching breakeven around 2027? It would be interesting to know if Intel has a plan B, and – if so – if plan B involves going fabless as an extreme option. The new financial reporting structure makes it easy to spot the lossy business within Intel (if any), and this easy spotting capability may sound like setting the stage for divestiture. A key difference from 2008, however, is the current chip war economy, with taxpayers around the world currently subsidizing their respective domestic semiconductor industries. Depending on the dose, public subsidies can offset a company’s inefficiencies and make it competitive on the market. Let’s now move to the Intel announcement and other related news.

Intel’s financial reporting structure to separate Foundry from Products

On April 2, Intel outlined a new financial reporting structure that is aligned with the company’s previously announced foundry operating model. The new reporting structure establishes a foundry relationship between Intel Foundry, the company’s manufacturing organization, and Intel Products, comprised of the company’s product business units. Beginning with the first quarter 2024, Intel will present segment results aligned to the following operating segments: Client Computing Group (CCG); Data Center and AI (DCAI); Network and Edge (NEX); Intel Foundry; Altera; Mobileye; and Other. CCG, DCAI and NEX will collectively be referred to as Intel Products; Altera, Mobileye and Other will collectively be referred to as All Other. Under this new structure, Intel Foundry will recognize revenues generated from both external foundry customers and Intel Products, as well as technology development and product manufacturing costs historically allocated to Intel Products. Instead of recognizing manufacturing costs that were previously allocated to the product operating segments, Intel Products will be charged a market-based price by Intel Foundry. Following the adoption of this new reporting structure, Intel filed a new Form 8-K containing recalculated operating segment results for the years 2023, 2022 and 2021.

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