Tuesday, October 11th 2022

Intel Embraces an Internal Foundry Model

Intel CEO Pat Gelsinger sent the following statement announcing creation of an internal foundry model for external customers and Intel product lines and the creation of the IDM 2.0 Acceleration Office, under the leadership of Stuart Pann, to all company employees on Oct. 11: When I returned to Intel in 2021, I introduced our IDM 2.0 strategy: a multiyear journey to regain unquestioned technology leadership, manufacturing scale and long-term growth. Today, we begin the next phase of our IDM 2.0 journey.

In the first phase of our transformation, we made significant progress on our process roadmaps and capacity. We remain on track to deliver five process nodes in four years, and we've invested in the capacity required to meet the industry's demand for semiconductors, bringing much-needed balance to the global supply chain.
The next phase of our IDM 2.0 journey requires a fundamental shift in mindset. We must embrace an internal foundry model, not only for our external customer commitments but also for our Intel product lines. This is a significant evolution in how we think and operate as a company, but the systems and infrastructure that served us well in the IDM 1.0 world will not enable us to achieve the full potential of IDM 2.0.
Internal Foundry Model Explained Implementing an internal foundry model means establishing consistent processes, systems and guardrails between our business unit, design and manufacturing teams. This will allow us to identify and address structural inefficiencies that exist in our current model by driving accountability and costs back to decision-makers in real time. It will also put Intel's product groups on a similar footing as external Intel Foundry Services customers and vice versa.
For example, our business unit and design teams will be able to consider the potential impact on their margins if they want to run an additional product stepping, while the manufacturing team will be able to assess requests based on actual costs and impact on factory output. This will give teams the tools and transparency they need to find the most effective and cost-efficient solutions before implementation in silicon, ultimately helping us maximize factory output, reduce costs and shorten design cycles.

We will also create a foundry accounting model that encompasses manufacturing, technology development and Intel Foundry Services. This will give us more transparency into our financial execution and will allow us to fully benchmark and drive ourselves to best-in-class foundry performance.

IDM 2.0 Acceleration Office (IAO) To facilitate this effort, I have established an IDM 2.0 Acceleration Office, which will be led by Stuart Pann, Senior Vice President of our Corporate Planning Group (CPG). In addition to his responsibility leading CPG, Stu will take on the role of Chief Business Transformation Officer, reporting to Chief Financial Officer Dave Zinsner and joining the executive leadership team. The IDM 2.0 Acceleration Office will work in close collaboration with all business units and functional teams to bring this new internal foundry model to life.

Execution Excellence Alongside initiatives like the next evolution of our tick-tock model and our Gladius program for driving excellence in product development, embracing an internal foundry model will enable us to deliver the competitive cost structure and predictable cadence of leadership products essential to our success.
We will continue to provide regular updates on these initiatives and our progress in restoring our culture of execution excellence.

This is our time to take action as One Intel to unleash IDM 2.0's full potential. Thank you in advance for your hard work and commitment to our strategy.
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10 Comments on Intel Embraces an Internal Foundry Model

#1
Nordic
Design blames manufacturing. Manufacturing blames design. Intel separates them to add accountability so they can see where the issues actually are. Am I reading this right?
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#2
thestryker6
This seems more aimed at providing a clear firewall between the two business units for the sake of future foundry customers. This tells potential customers that the foundry business isn't going to be dictated by Intel's CPU division. I'd imagine that there will be an internal benefit for accountability as well, but I think it's predominantly for external customers.
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#3
hs4
To deliver five process nodes in four years, each nodes might have small capacities of production (in the Tick-tock era, nodes were renewed every two years). As with AMD, there will be a mix of products manufactured at different nodes at the same time. Nowadays, the manufacturing process has become more complex, and it is probably difficult to completely synchronize the manufacturing process and logic design as in the good old tick-tock model.
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#4
DeathtoGnomes
AS long as they keep the PR and sales teams out of the mix and stop them from trying to run things again, it should all be fine and dandy.
Posted on Reply
#5
bug
Whatever. You guys just keep churning out the goods.
Posted on Reply
#6
Wirko
thestryker6This seems more aimed at providing a clear firewall between the two business units for the sake of future foundry customers. This tells potential customers that the foundry business isn't going to be dictated by Intel's CPU division. I'd imagine that there will be an internal benefit for accountability as well, but I think it's predominantly for external customers.
I agree. Still, Intel remains the highest priority customer of Intel, so Intel will often be able to dictate the terms to Intel.

The firewall is also supposed to stop reduce the leakage of customers' confidential information to the chip design division. (But ... have they never thought of that until now?)
Posted on Reply
#7
bug
Google went through something similar when they became Alphabet. It seems at some point, you just need to admit you need to draw some boundaries. My current client works hard to erase boundaries and, while it makes for nice presentations and happy managers, it's an absolute disaster for actual productivity.
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#8
thestryker6
WirkoThe firewall is also supposed to stop reduce the leakage of customers' confidential information to the chip design division. (But ... have they never thought of that until now?)
Realistically that information couldn't be turned around fast enough to make a difference let alone be worth destroying their reputation for. While it undoubtedly can still serve that purpose I think it'd be more to make everyone feel better rather than have a practical benefit.
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#9
R-T-B
bugWhatever. You guys just keep churning out the goods.
What is this, a butter foundry?
Posted on Reply
#10
bug
R-T-BWhat is this, a butter foundry?
It could be. We need their products, but not in large quantities, because that's harmful for our health :P
Posted on Reply
Dec 11th, 2024 18:05 EST change timezone

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