The two current bosses of chip manufacturer Intel have admitted that the company may outsource its chip production following the recent departure of previous CEO Pat Gelsinger. One of the reasons could be a lack of success of the next stage of self-developed 18A manufacturing technology. The dual leadership of CFO David Zinsner and Michelle Johnston Holthaus, acting as interim CEOs, has at least no longer ruled this out.
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Intel is the only company in the industry that both develops and produces computer chips itself. Competitor AMD outsourced its own chip production to Globalfoundries, which was founded in 2008 as a contract manufacturer, more than 15 years ago. AMD initially still had shares in the company before Globalfoundries was completely transferred to Arab hands in 2012. A similar scenario could now also be facing Intel.
So far, Intel has stuck to manufacturing its own chips itself. But at the beginning of this month, the previous Intel CEO Pat Gelsinger was surprisingly forced into retirement after his strategy of positioning Intel as a contract manufacturer for other manufacturers did not really take off. At the same time, the company recently had to cope with high losses: a loss of 16.6 billion was recorded in the books for the last quarter.
New dual leadership only for transition
Now CFO David Zinsner and the head of Intel's client computing group Michelle Johnston Holthaus will run the company until a new boss is found. The US chip giant already has a few candidates for the top job, but the two interim CEOs are apparently not among them, because Intel's new CEO is supposed to come from outside.
According to media reports, Intel's board of directors has discussed a number of options in recent months. One of them: the splitting of Intel into chip designers and contract manufacturers. Gelsinger did not agree with this. Now, at an investment banking conference in San Francisco, Michelle Johnston Holthaus and David Zinsner were asked whether continuing this combination of chip design and manufacturing under one roof is linked to the success of the new 18A chip manufacturing.
Interim CEOs are keeping a low profile about the foundry division
Johnston Holthaus' answer to this is open. “Do I think it makes sense from a pragmatic point of view that the two are completely separate and there is no connection whatsoever? I don't believe. But someone will decide that,” she said, according to Reuters, indicating that decision will be up to the incoming Intel boss.
CFO Zinsner, however, points out that the chip contract manufacturing division called Intel Foundry is already operated separately from the other Intel departments, including in terms of accounting. The foundry division will also soon have a separate committee and its own software system for business processes. “Will it ever be completely separated? “That’s an open question for another day,” Zinsner also leaves his answer open.
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The 18A technology is an important step for Intel because the previous 20A manufacturing technology was not put into series production. Instead, Intel is relying on many TSMC chiplets for the current series of Core Ultra 200 desktop processors, codenamed “Arrow Lake,” and skipping 20A production. The successor 18A, on the other hand, is said to be better off. Intel already counts two Big Tech heavyweights among its clients for this production stage. After Microsoft, Amazon is Intel's second major 18A customer.
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