Intel Buying GF. $110B Chip Shortage Cost.

    The Chip Insider®
    July 16, 2021— Strategy and Tactics: Intel buying GF. $110B chip shortage cost. WildPhotons: I am a slow walker, but I never walk back...
    G. Dan Hutcheson G. Dan Hutcheson
    Summaries:
    Rumors of Intel buying GLOBALFOUNDRIES: The chatter has exploded across the industry about this ever since the Wall Street Journal published it yesterday afternoon. I'm even getting emails from retirees about it. Intel's stock was up sharply after the open this morning, while other key chip stocks were flat to down. Intel was still above a 7-day low set last Friday, at this writing, versus AMD, which set a low today. So, investors appeared to take the news in a positive light. Here's why: First of all, this is a no-brainer for anyone who thinks strategically about the semiconductor chess-board. So much so, that we've felt obliged to lay low in our views to not upset the apple cart. Actually, Risto first mentioned it was the obvious next strategic move for Intel within a day of Gelsinger doubling down on manufacturing and foundry. When Pat did that, his legacy became critically dependent on turning around a multi-decade failure by Intel to make a significant break into the foundry market that started with Andy Grove. Buying GF would solve some critical barriers to his success...Having a viable sales and marketing business front end that eats, sleeps, and drinks the foundry business...With technology competitive core-competency up-shifting from monolithic nano-scaling to heterogeneous polylithic scaling, chip companies will no longer be able to compete going forward by being solely focused on making a single-chip leading-edge solution...

    $110B: Chip shortage revenue cost to auto makers, says AlixPartners: This provides a great example of the downstream impact of mismanaging the chip supply chain. At the bottom of 2020's Auto IC market in May, chip purchases were...below September 2019's peak. They did not return to that peak until November of 2020. A simple ratio tells you the downstream cost the Auto Industry $144 for every dollar saved. This was arguably the worst supply-chain management blunder in history. But life isn't always that simple...

    Intel Buying GF. $110B Chip Shortage Cost.


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