Intel's Foundry Strategy for Growth & Idm 2.0: What's Different?
October 29, 2021 — Strategy and Tactics: Intel's Foundry Strategy for Growth & IDM 2.0: What's different? WildPhotons: Mastering yourself is true power...
G. Dan Hutcheson
Why Foundry is the best growth strategy for lntel
Many find Pat Gelsinger's foundry strategy for Intel to be counter-intuitive. One thing is for sure, his IDM 2.0 strategy is on a Grove-ian level of doing the unexpected. Still, I find Pat's foundry strategy a straightforward answer to Intel's growth constraint of being trapped in is dominance of PC processors and the data center... Intel's moats in these spaces have become about as threatening to competitors as Hadrian's Wall was to barbarians. They can go after market adjacencies like mobile or GPUs, but then they face competitors like Qualcomm and Nvidia who have huge IP moats against an Intel with few core strengths. The negative image of Intel's moats in the game of semiconductor Wei Chi reveals that it's Intel who is surrounded. Pat understands this and wants to break out...
IDM 2.0: What's different about it? ...
One word! I got a chance to ask Pat Gelsinger what's different about IDM 2.0 from IDM 1.0. After all, on the surface IDM 2.0 is not perceivably different from Intel 1.7, under its seventh CEO in three ways: 1) Intel 1.7 designed and made its own chips, 2) it offered foundry services, and 3) it had been offloading mature chip designs to foundries for decades under a strategy developed by Jerry Parker to control capital expenditures. Pat mentioned all 3, with the difference that it's foundry would no longer have to come to the fight with its hands tied behind its back. More importantly he added a critical word... This difference is existentially critical because it means ... TSMC's yield learning is ... the rate of Intel's...
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