IT industry outlook (3): Intel heralds angstrom era

Colley Hwang, DIGITIMES, Taipei 0

Intel CEO Pat Gelsinger has been maneuvering a lot lately. The tech-savvy CEO is determined to redefine technical specifications as a strategic resolution to break the deadlock in competition. The planned ramp-up of two new fabs in Arizona in 2024 is a rarely seen massive investment of US$20 billion for Intel in recent years. This is an indispensable investment plan for Intel, in consideration of its meager share of 6% of the world's 12-inch wafer fab capacity.

Not everyone can define the IT market, and no one in Taiwan can do this except Morris Chang. But building Silicon Valley's very first semiconductor company Fairchild has made Intel's co-founders IT industry's gurus. Gelsinger has inherited the legacy from these co-founders. What he says is always widely quoted around the international news media.

Out of the annual output value of about US$90 billion in the wafer foundry sector, TSMC overwhelmingly leads with a 55% market share, followed by Samsung's 17%. This excludes output from Intel's foundry business. Now Gelsinger sees the wafer foundry business as part of the company's latest IDM 2.0 initiative. Intel says its mega fab projects are a demonstration of its determination to rekindle its foundry business. The 2nm process node to be ramped up in 2024 and the next 1.8nm process node are to be undertaken at Intel's 20A and 18A fabs, respectively. Intel may have previously encountered delays in commercializing some process nodes, but it is by no means a big talker. We must assume Intel will achieve its goals, and at the same time try to understand its key strategic initiatives.

Intel is heralding the coming of the angstrom era (1Å = 0.1nm) for semiconductors. Western enterprises are good at redefining the market and let players compete within the defined turf. Intel claims it is now meaningless to fight over nanometer processes, and it is taking the battle to the next level - the angstrom level. What's more, following the introduction of the FinFET process in 2011, Intel has launched a new gate all around technology, Ribbon FET, which enables higher transistor density. The new technology will be rolled out in 2025 and will bring a new look to the semiconductor industry.

For Intel, it is a tough battle in terms of process node and technology. Nevertheless, it is the top dog in the global IT industry we are talking about. With the retirement of Morris Chang, TSMC's management faces a critical and formidable challenge.

IT supply chain

(Editor's note: This is part of a series of analysis on the IT supply chain by DIGITIMES Asia president Colley Hwang.)

Colley Hwang, president of DIGITIMES Asia, is a tech industry analyst with more than three decades of experience under his belt. He has written several books about the trends and developments of the tech industry, including Asian Edge: On the Frontline of the ICT World published in 2019, and Disconnected ICT Supply Chain: New Power Plays Unfolding published in 2020.