Intel CEO Charts Future Path with IDM 2.0, Forms Research Pact with IBM

In a major pivot, Intel CEO Pat Gelsinger says the semiconductor giant will manufacture chips for competitors. Intel will also invest $20 billion to aggressively add manufacturing plants in the U.S. and Europe.

Looking to the future, Intel is partnering with IBM.

Gelsinger this week delivered the sweeping and aggressive blueprint, describing how he intends to restore Intel’s technical and market leadership.

As the largest provider of semiconductors for PCs and servers, Intel has fallen behind its rivals in recent years. Looking to reverse that tide, Intel tapped Gelsinger, as CEO in January. Gelsinger’s presentation  represents swift actions that could shape the competitive environment for device, data center and cloud compute infrastructure for years to come.

Intel’s Pat Gelsinger

“We are the only company with the depth and breadth of software silicon platforms packaging and process with at-scale manufacturing our customers depend on for their next-generation innovations,” the Intel CEO said. “To meet this moment and position our company for the future, I am setting a course for a new era of innovation and technology leadership.”

Besides offering Intel’s client and data center CPU road map, Gelsinger revealed an ambitious plan to create more efficient manufacturing capacity. Intel describes the effort as the second generation of its integrated device manufacturing (IDM 2.0) model.

Intel’s $20 billion expansion of manufacturing capacity in the U.S. and Europe aims to lessen its dependency on one region. Currently, 80% of Intel’s manufacturing plants are in Asia. The company broke ground on the first of two new plants on Monday at its campus in the Phoenix area. Gelsinger said Intel will launch a second site in the U.S. and one in Europe within the year.

Intel Foundry Services

The most notable departure for Intel is the decision to provide manufacturing capabilities to other chipmakers, including competitors. The company launch of Intel Foundry Services is a separate business unit. Gelsinger said Intel Foundry Services will satisfy unmet and growing demand for semiconductors.

“We see strong market demand overall,” the Intel CEO said. “The combination of our internal and external capacity requirements allows us to build ahead, create more capacity, that we can be satisfying those collective needs of our customers. And underneath that we’ll meet our commitments.”

As a separate business unit, Intel Foundry Services will be accountable for its own profit and loss performance, Gelsinger said.

“Obviously, we’re going to work hard to always be on the front foot of the technology, of the capacity and overachieving on every aspect of our businesses as we look forward,” he said.

Historically, Intel has shunned such a move, despite frequent calls for …