Intel's forcing its chip designers to pay market rates not mate's rates at its own fabs

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Intel's big fab split isn't about selling off its facilities like AMD.

Intel's announced a new switch to an"internal foundry model" which creates more separation between the products it designs and the fabs it uses to manufacture them. And there are some really good reasons for this. One, it creates a clear, secure distinction between the Intel that is designing new chips and the Intel that wants other people who also design new chips to come and manufacture them in its fabs.

It might also mean Intel's designers are maybe less ambitious in terms of how aggressive they are on densities of new process nodes, but that could be a good thing. We've already seen potentially good progress in Intel's target of five nodes in four years, and disconnecting chip generations from that process has certainly helped.

But it should also create more customer confidence in Intel's contract foundry business Intel Foundry Services. There has been some concern over whether customers might have issues giving up its designs for production if they are producing essentially competing chips to what Intel manufactures for itself. With this more distinct separation of the foundry group itself any customer IP is kept completely separate from the wider company.

 

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