Intel's Vice President of Corporate Planning, John Pitzer, has discussed the position of the firm's foundry division, saying that there's massive optimism with upcoming processes, as well as the current advanced packaging portfolio.
Intel's VP Dismisses Concern Of a Foundry Spin-off, Driven By Interest Around Chips & Advanced Packaging
Intel's VP was spotted talking at the UBS Global Technology and AI Conference, where he discussed the company's progress with the upcoming 18A process. Intel is currently mass-producing Panther Lake chips, which are set for retail showcase by January 5. More importantly, the progress around yield rates of the 18A node is a key factor in determining whether the process will be 'healthy' for the foundry division in terms of margins. Intel's VP disclosed that yields are still not at the "optimal" level, but since the appointment of CEO Lip-Bu Tan in March, progress has been phenomenal.
And I see -- I think we're starting to see the benefits of that because at the very least, yields are still not at the levels we want them to be and they will continue to get better over time, as Dave talked about on the earnings call. But we are now in a position where we're seeing predictable improvement month-on-month, that's in line with what you would expect as an industry average.
Addressing the rumors around the external interest in the 18A-P node, Intel's executive discussed that the process has seen "good maturity on the PDK", and Intel will re-engage external customers to gauge their interest. The 18A-P and the 18A-PT will be adopted for both internal and external use, which is one of the reasons why there have been reports of consumers showing massive interest in the processes, given their early progress with PDKs. However, Pitzer did say that the IFS would refrain from talking about customers and instead would wait for their clients to disclose potential node adoption.
Advanced packaging is turning out to be a massive prospect for Intel Foundry, considering the bottleneck in CoWoS output, and Intel's VP has validated the fact that there's "good success with some advanced packaging customers", which indicates that EMIB, EMIB-T, and Foveros packaging solutions are being looked at as alternatives to TSMC's offerings. Intel's executive claims that customers are approaching as a result of a "spillover effect," and that the firm is engaged in "strategic conversations."
Yes. I mean we're pretty excited about the technology. I mean if you go back and think about the journey we've been on in advanced packaging, we were pretty excited about the business about 12, 18 months ago, in large part because we saw a lot of customers coming to us to be spillover capacity because CoWoS was so tight. And for full transparency, we probably under hit the potential for that business.
I think TSMC did a very good job increasing CoWoS capacity. We probably underperformed a little bit and getting Foveros where it needed to be. But the advantage of having that happen is it brought customers in the door and it allowed us to start moving from tactical conversations to strategic conversations.
It would be incorrect to say that the optimism within Intel Foundry is significantly lower compared to where it was a few months ago, which is why Intel's VP also discussed the fact that a foundry spinoff isn't in talks yet. External customers are now considering both chip and packaging solutions from the IFS, which is one reason why the Intel administration is confident that the foundry division can improve its current state.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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