When Intel established the foundry department in early 2021, the cost of production nodes in major fabs has been pushed up to a very high level, and even higher, also has enough strength to go head-to-head with Samsung and TSMC.
In fact, Intel stated from the beginning that it wanted to make the division a foundry on the same scale as Samsung and TSMC. It now appears that the company’s current plan is to make it the second-largest foundry by 2030.
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Randhir Thakur, president of Intel foundry services, told Nikkei Asia: “Our goal is to be the second largest foundry company in the world by the end of the 2020s, and (we) want to see good foundry margins.”
To be No. 2 in the global foundry market means Intel must beat Samsung Electronics. According to TrendForce data, Samsung generated more than $20 billion in foundry revenue in 2021 and is on track to surpass that number in 2022.
As of the first quarter of 2022, Samsung owns about 16.3% of global foundry revenue, significantly behind market leader TSMC (53.6%), but significantly ahead of peers UMC (6.9%) and GlobalFoundries (5.9%).
That compares with $576 million in year-to-date revenue for Intel’s IFS business unit. Once the Tower Semiconductor acquisition closes in early 2023, Intel’s IFS division will add about $1.5 billion in annual revenue, thus transforming it into the 7th or 8th largest foundry in the world, but still well below Samsung in terms of revenue.
To become the world’s second-largest chip foundry, Intel must adopt a multifaceted strategy, including the following:
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Develop cutting-edge process technology to compete with Samsung and TSMC in terms of power, performance, and area (PPA), while also considering yield and time-to-market.
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Leading production capacity for IFS customers.
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Maintain Tower Semiconductor’s operational and competitive position through innovations in proven technologies.
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The orders are mainly from the current foundry customers of TSMC and Samsung, and may also be able to steal some customers from GlobalFoundries and SMIC.
