Speculation: Intel will become fabless

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With the loss of its manufacturing lead, will Intel become fabless?

  • Yes, Intel is a product designer at heart, and they will seek a more flexible fabless model.

    Votes: 22 13.0%
  • No, manufacturing is integral to Intel, and they will continue to invest to stay competitive.

    Votes: 147 87.0%

  • Total voters
    169

JasonLD

Senior member
Aug 22, 2017
479
440
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They may still go fabless. If they can create a viable foundry business, they might spin it off and become its largest customer, like AMD did with GF.
I think at most, IFS will become wholly owned subsidiary business of Intel. AMD was forced to spinoff GF just to survive after all.
 
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Vattila

Senior member
Oct 22, 2004
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I think at most, IFS will become wholly owned subsidiary business of Intel.
Now we have Intel co-investing in fabs with partners with a 51/49 percent ownership model. I think this development is a big step toward a fully independent IFS, effectively splitting Intel into independent design and manufacture businesses. As I may have stated previously, I think independence is needed to gain full support from the industry (and governments), and hence necessary for the success of IFS.

 

JasonLD

Senior member
Aug 22, 2017
479
440
136
Now we have Intel co-investing in fabs with partners with a 51/49 percent ownership model. I think this development is a big step toward a fully independent IFS, effectively splitting Intel into independent design and manufacture businesses. As I may have stated previously, I think independence is needed to gain full support from the industry (and governments), and hence necessary for the success of IFS.

Nah, I think it is a bit premature to assume Intel will spin off their IFS. It may enable Intel to get more fund out of Chips Act by inviting another company in the mix, and overall less money out of their own pocket by getting outside investment.
 

maddie

Diamond Member
Jul 18, 2010
4,413
4,012
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Mixing threads here.

This might also be a good way in freeing resources to continue with the client GPU project. We really want GPUs, but how do we fund it with next few years of reduced revenue.
 
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Doug S

Golden Member
Feb 8, 2020
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Nah, I think it is a bit premature to assume Intel will spin off their IFS. It may enable Intel to get more fund out of Chips Act by inviting another company in the mix, and overall less money out of their own pocket by getting outside investment.
Interest rates are going up, so maybe instead of borrowing money for capital projects they feel it is better to take on partners in some cases?

I agree it is an interesting development, and if we see this become their model for new fabs going forward I think going fabless becomes inevitable.
 
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jpiniero

Lifer
Oct 1, 2010
12,807
4,094
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From Intel's financial statements, the new "co-investment" entity has a name (Arizona Fab LLC) and says they are planning on this closing by the end of the year. Also says Intel is required to use the two fabs at an unspecified minimum level or face penalties... which sounds pretty WSAish.
 

Doug S

Golden Member
Feb 8, 2020
1,492
2,182
106
From Intel's financial statements, the new "co-investment" entity has a name (Arizona Fab LLC) and says they are planning on this closing by the end of the year. Also says Intel is required to use the two fabs at an unspecified minimum level or face penalties... which sounds pretty WSAish.

I wonder if this is some sort of financialization scheme as much as it is about co investment. Intel is losing money now, and will have a TON of writeoffs coming from their fab investments over the next few years. But when you aren't making money, tax deductions aren't of much use. Sure, you can carry them forward but the time value of money means they are worth less in the future than today (and it only gets worse if there's inflation)

The co-investment strategy allows them to essentially "sell" a lot of those writeoffs. Maybe all of them, if this is structured in a way where the outsider investor is able to take more of the losses than their percentage of ownership (don't ask me how, that's what they pay all that money for top tax accountants/lawyers to find loopholes in text vs intent of tax laws)

The investor will put in some minimal requirements about how much Intel must use these fabs, etc. to insure they can't walk away if things get bad for them, but probably the plan is that the investor sells their interest after a few years when the bulk of the amortization has been written off. The buyer will either be Intel, or if they have gone / are planning to go fabless, the fab holding company spinoff.
 

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