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Intel: Will Lip-Bu Tan Build Gelsinger’s Promised Fabs?

Intel: Will Lip-Bu Tan Build Gelsinger’s Promised Fabs?

By Bolaji Ojo

What’s at stake:

Lip-Bu Tan’s predecessor as Intel CEO wanted to build multiple new fabs in Europe and US. Chip equipment makers, fab shell builders, political leaders and communities were counting on the planned $100 billion-plus capex splurge. Will Intel revive Gelsinger’s dreams or were they so implausible from the beginning that it’s a risk Intel must avoid?

Lip-Bu Tan’s comments at his first analysts’ conference call as CEO at Intel Corp. included an indictment of the tenure of Patrick Gelsinger, his predecessor, and even some prior leaders of the chipmaker.

Tan didn’t mention any of Intel’s five past substantive CEOs – Gelsinger, Bob Swan, Brian Krzanich, Paul Otellini and Craig Barrett – by name. He may not have meant to indict these people, but the scathing verdict delivered by Tan about what Intel has become represents a condemnation of the company’s previous leadership.

“One of my biggest learning so far is that we need to fundamentally transform our culture and the way in which we operate,” Tan said. “Organizational complexity and bureaucracies have been suffocating the innovation and agility we need to win.” Intel had developed a “siloed” operating system,” Tan said. “I’m here to fix this.”

There is a lot hanging on Tan delivering that “fix.” For this report, though, we will focus on fabrication and process development plans made by his predecessor Gelsinger, who promised to help fabless chipmakers and governments in America and Europe resolve their dependence on semiconductor fabs based in Asia. During Gelsinger’s tenure, Intel announced plans to spend a range of $100 billion to $200 billion on new fabs and back-end processing facilities, most of them to be based in the United States. What will be the fate of Gelsinger’s promised fabs, the sites selected in Ohio, Magdeburg, Germany, and plans to help fund semiconductor education at community colleges in the United States?

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Infineon Bulks Up with $2.5B Marvell Ethernet Deal. Expect More

By Bolaji Ojo

What’s at stake:

Defying market turmoil, Infineon is proceeding with its growth plan. It is buying Marvell’s automotive ethernet division to beef up its software defined vehicle (SDV) and robotics offerings, but Infineon may be angling for more as it morphs from one of Europe’s top chipmakers into an even bigger global leader in other market sectors.

Two months ago, Infineon Technologies AG quietly arranged a €2 billion ($2.7 billion) revolving line of credit without disclosing why, noting only that it was benefitting from the “the strong trust” it enjoys in the banking industry.

Industry observers assumed Infineon was filling up its cash reserves to pay down debts. However, as the Ojo-Yoshida Report observed in a LinkedIn post, the company had other plans for the funds. On Monday, Infineon cleared the air, saying it offered $2.5 billion for Marvell Technologies’ automotive ethernet business. The deal, Infineon said, will be “financed from existing liquidity and additional debt.”

“This [Marvel] business holds a number one position in automotive Ethernet and offers a complete portfolio that is fully complementary to our own offering,” said Jochen Hanebeck, CEO of Infineon, during a conference call with analysts. “This deal will enable us to accelerate the transition to software defined vehicles by advancing zonal architectures based on Ethernet networks.”

Read More »Infineon Bulks Up with $2.5B Marvell Ethernet Deal. Expect More
Rapidus 2nm is Rolling, but Just How Far Can It Go?

Rapidus 2nm is Rolling, but Just How Far Can it Go?

By Bolaji Ojo

What’s at stake:

Rapidus is quietly but forcefully laying the foundation for the re-establishment of Japan as a global power in semiconductor design and production. Less than 3 years after it was founded in August 2022, the Japanese company has moved hurriedly towards becoming a top-tier foundry. While it’s made some progress, however, questions persist about its future, and by extension, Japan’s dreams for advanced chip manufacturing locally. Rapidus’ founders are betting the company can pull this off.

Rapidus Corp. expects to start churning out semiconductors using 2-nanometer next-generation process technology by 2027. If successful, it would be joining a very exclusive club.

Leading that group is Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), the world’s largest contract chip manufacturer, and an enterprise far ahead of the competition in customer patronage and technology leadership. Rapidus would be joining a select group of rivals trying to muscle in on TSMC’s dominance of leading-edge chip production.

The progress Rapidus has so far made in assembling all its needs to compete successfully in the next-generation chip production process is so astounding that many observers now believe the company could make a dent, albeit a little one, in TSMC’s market share of the sector. The question, though, remains whether Rapidus can sustain the breakneck speed it used to establish itself as a formidable potential player.

Within two years, the 2nm chip foundry group would have also expanded to include Samsung Semiconductor and Intel Corp., which wants to race ahead of the competition by delivering 18-angstrom (18A) chips, or approximately 1.8 nanometers – a notch finer than 2nm. This week, Lip-Bu Tan, Intel’s new CEO, assured the world that the Santa Clara, Calif., company was making swift advancements in its pursuit of 18A, which he said, “is set to win high volume production in the second half of this year with Penta Lake.”

Intel’s successful delivery of 18A this year – without any production or yield issues – would highly impress the chip market. But even this admirable goal wouldn’t hold the candle to Rapidus’ success if the company were to begin shipments of 2nm chips two years later. Unlike its main competitors in the next-generation chips production business, Rapidus is beginning to behave like and sound like a precocious child that is aiming to run before it can even crawl.

This week, Rapidus released additional information about its 2nm race that backs up its founders’ assertion that the ambitious goal they have set for the company is achievable. It bagged additional funding for the venture from the Japanese government, bringing the total amount so far received to more than $11 billion. The approval of Rapidus’ fiscal 2025 plan and budget for the 2nm semiconductor project on Tuesday by Japan’s New Energy and Industrial Technology Development Organization (NEDO) has armed the company with the resources to push ahead with its next-generation process plans, according to Rapidus executives.

The company’s 2nm production capacity development is split into two parts, they said. The first is the front-end manufacturing, which Rapidus launched within months of its establishment in 2022. It involves the construction of the company’s first production system, termed the Innovative Integration for Manufacturing (IIM) facility based in Chitose, Hokkaido.

Rapidus 2nm is Rolling, but Just How Far Can It Go?

Construction experts and engineers from IBM are working at the site with Rapidus employees to develop the 2nm logic semiconductor mass production technology, the company said. It added that the work has so far achieved the planned targets. Already, EUV lithography and other equipment have been installed at the location, meeting objectives set for fiscal 2024, according to Atsuyoshi Koike, CEO of Rapidus.

Read More »Rapidus 2nm is Rolling, but Just How Far Can it Go?
Intel Board Shuffle: Another Missed Opportunity

Intel Board Shuffle: Another Missed Opportunity

By Bolaji Ojo

What’s at stake:

Intel is in a precarious position. In sales, it is still one of the biggest semiconductor companies in the industry, but the juxtaposition of its market value with those of rivals tells a dismal story. The recent appointment of Lip-Bu Tan as CEO marked the beginning of a much-needed house-cleaning at Intel. By not extending this exercise to the board of directors, the company is not holding long-term members to account or showing it understands the depth of the rot it must flush out.

Intel Corp. “is at a critical moment in its history,” and is facing “undeniable challenges.”

This critical assessment comes from Frank D. Yeary, chair of Intel’s board of directors. In a lengthy foreword to the company’s latest annual report, Yeary warns that Intel “has been overshadowed at times by our own execution problems and not enough focus on the needs of our customers.” The company, Yeary notes, must focus on “delivering long-term value for shareholders.”

This sounds fine, reading like a text that Intel’s financially bludgeoned investors could have written. Ironically, however, Yeary’s blunt analysis excludes one brutal fact; that Yeary and many of Intel’s long-serving directors have been a deadweight around the company’s neck, failing to provide the leadership it needed at critical moments over the last decade or more.

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Synopsys Talks and Walks AI with Nvidia

Synopsys Talks and Walks AI with Nvidia

By Bolaji Ojo

What’s at stake:

Synopsys has become a leading proponent for AI in the design engineering community. Its role deep in the silicon design chain gives it an extraordinary opportunity to leverage AI, but it must sell the innovation to customers and developers while going through its own complex transition. Can it tap the benefits of AI while leading a coalition of customers, chipmakers, OEMs and early adopters?

To say EDA vendor Synopsys Inc.’s business and market strategy have changed in the last couple of years would be an understatement. Identifying the element – artificial intelligence – that has triggered and is fueling the change is a straightforward task, though.

The signs of transformation – and transition – at the EDA vendor are obvious to long-term watchers of the sector. CEO Sassine Ghazi recently marked his first anniversary in the position in January after founder and industry veteran Aart J. de Geus stepped aside, taking on the role of executive chair. Those are the surface changes. Deeper and more structural developments are ongoing, the planned $35 billion acquisition of Ansys being one of them.

Synopsys hopes to close the Ansys transaction in the first half of this year. A partnership with Nvidia for the use of the company’s CUDA-X has also been signed. The passing of the CEO baton has been smooth and uneventful, too. As has been the growth of the company despite significant market turbulence. Synopsys sales are forecast to rise this fiscal year to a record $6.8 billion, continuing the strong double-digit expansion it has witnessed since 2022. What lies ahead for the company in the era of AI is more difficult to ascertain, however.

Read More »Synopsys Talks and Walks AI with Nvidia