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26 Mar 2021

Intel’s new CEO Pat Gelsinger announced the new IDM 2.0 strategy and the core of it is to reinforce its manufacturing capabilities. It will not only retain its fabs but will invest $20B in two new fabs and also launch a new Intel Foundry Services (IFS) company. This new company will offer Intel manufacturing to external customers. This can mean a big shakeup in the foundry industry which is dominated by TSMC and followed by other smaller companies like Samsung, Global Foundries, UMC and SMIC. Counterpoint’s Foundry Capacity Tracker forecasts the foundry industry to reach $90B in 2021.

[Exhibit 1] Global Semiconductor Foundry Revenues Share % in 2020

Source: Counterpoint Semiconductor Foundry Tracker 2020 * Samsung includes only pure foundry revenue excluding LSI division revenue Research Vice President, Neil Shah, commented, “The ongoing pandemic has driven unprecedented demand for more compute (and hence semiconductors) from devices to networks to datacenters which is only going to rise from here. This has disrupted the existing and future demand forecasts creating a serious shortage of critical components as existing foundries are running on full capacities. Further coupled with the growing geopolitical cold-war, big economies and companies are aiming to diversify and ultimately become self-reliant. They are willing to invest billions of dollars to build new foundries and reduce the semiconductor dependence on just a handful of foundries. There is a significant demand-supply imbalance which Intel (& USA) looks to cash on as we enter this new decade and era of advanced computing, communication and connectivity." Research Director Dale Gai also shared his opinion. “Intel’s recent IDM 2.0 strategy, means it will revive its foundry service. We expect Intel will take different approaches to penetrate the market from the past and it has the advantage of US local manufacturing. However, it still needs to prove it is competitive in advanced nodes and IP/platform where TSMC has set up high barriers to retain its top customers. Intel had entered the foundry service market many years ago by offering its 14/22nm technology to customers, but was unsuccessful in both market shares and financial returns. This time it also faces competition from TSMC and Samsung Foundry, which have both advanced technology roadmaps and track records for winning high volume outsourcing orders.” Commenting on the prospect of Intel’s entry Senior Analyst Sujeong Lim commented, “It will take about 3 years for Intel to build up this practice but it certainly has the capability to enter the top 3. The demand in the industry is strong and new technology like 5G, IoT, AI, connected cars will consume more and more semiconductors. US companies will probably be Intel’s first customers.” Background: Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry. Analyst Contact:  Dale Gai Counterpoint Research press(at)counterpointresearch.com Counterpoint’s foundry capacity tracker provides data and forecasts on the utilization rate by technology node for major foundries including TSMC, Samsung and SMIC. It also provides a quarterly market share report for the top manufacturers. You can also visit our Data Section (updated quarterly) to view the smartphone market share Global, the USA, China , and India.