Intel Commits $185 Billion to Foundry Business Expansion

Three years after CEO Pat Gelsinger announced Intel would create a foundry business that took on contract manufacturing gigs, Chipzilla has committed to more than $185 billion in spending across new and existing fab, packaging, and test sites.and up to $11 billion of loans secured, Intel Foundry – an independently managed unit under the Intel umbrella – is pushing ahead with its plan to become the number two foundry operator behind TSMC by 2030.

Beyond manufacturing delays, Intel faces several other challenges bringing these fabs online. First is rising construction costs – which have ballooned since Gelsinger first announced the Arizona and Ohio projects. Another challenge facing Intel and others building fabs in the USA is staffing. Shortages of skilled staff have forced delays for TSMC, while Intel is actively working to train personnel to run these facilities when they come online.upgrades to its Rio Rancho, New Mexico facility –known as Fab 9 and Fab 11x. These upgrades – originally expected to cost $3.5 billion but now estimated to cost closer to $4 billion – aim to enable the facility to support advanced packaging in high volumes.

The latest Intel update on construction progress contains little detail as to the status of the German build, but does mention an apprenticeship program to train local workers to run the facility when complete.. Intel needed about 3,000 staff to run the plant, but its three-year apprenticeship program reportedly had just two candidates enrolled for 2023, and 20 slated to start in 2024.

In addition to fabs, Intel has also made upgrades to existing facilities – including Fab 34 in Ireland, where the story is much the same as the others. Announced alongside Intel's investment in Germany, the Leixlip, Ireland-based fab was due to receive a €12 billion investment to upgrade the facility to support EUV lithography necessary to produce chips using the Intel 4 process.

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Intel's Foundry Business Reports Decline in Revenue and Operating LossIntel's foundry business experienced a decline in revenue in 2023, resulting in a $7 billion operating loss. CEO Pat Gelsinger anticipates even worse numbers for this year and announces a reorganization to align the chipmaker with its competitors. The reorg involves reporting results from various segments, including Client Computing Group, Data Center and AI, Network and Edge, Intel Foundry, Altera, Mobileye, and Other. Foundry is now a standalone segment, while CCG, DCAI, and NEX are classified as "Intel Products." This change is significant as the Foundry segment will now recognize revenues from external customers and Intel Products, along with associated costs.
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