“Several companies, including giants Nvidia and Qualcomm, are likely to collaborate with Intel on packaging and/or chip capacity, and this seems to go somewhat unnoticed.“
I'm bullish on Intel for three main reasons: CEO Pat Gelsinger's leadership, the company's strong ecosystem, and Intel's INTC.
An ambitious foundry business – which may have found the perfect moment to become the most important driver of Intel's future.
Sam Altman, CEO of Open AI, recently attracted widespread attention when he appealed for up to $7 trillion to develop the capacity to manufacture silicon chips capable of running artificial intelligence. The unprecedented scale of this vision, equivalent to more than 20% of the United States' gross domestic product, has captured the world's imagination. Here was the person who brought AI to the masses saying that the chip industry currently lacks what it takes to support the development of factories, data centers and infrastructure.
At first, Altman's $7 trillion price tag seemed ridiculous to me, just based on its size, but the more I thought about it, the more I realized that the investment required to build chips would be 10, 100, or even 1,000 times more powerful. By the end of this decade. It would require a huge investment, and while it's exciting to think that Altman would want to do it alone, it might be interesting to think about the partners Altman would want to bring with him.
Chip maker for the West
Intel aims to be the West's leading chip manufacturer, while Altman wants to reimagine the global supply chain and AI chip industry. Maybe it's time to ask whether it's just a coincidence that Altman's company, Microsoft MSFT,
CEO Satya Nadella, US Commerce Secretary Gina Raimondo, and a group of global semiconductor business leaders like Arm Holdings ARM,
broadcom avgo,
synopsys SNPS,
CDNS Cadence Design Systems,
Ansis Anas,
Others will meet Wednesday at Intel's foundry event in San Jose, California.
Intel will provide an important set of updates on its foundry strategy. While Intel's foundry business has been one of the biggest bright spots over the past few quarters, including a 63% jump in the fiscal fourth quarter, it still feels like this is an underappreciated asset within Intel's portfolio — especially Given that Taiwan Semiconductor Manufacturing Company. TSM,
It manages an operating margin of approximately 40%.
Much focus has been placed on whether Intel can achieve success with its AI GPU and silicon. So the truth is that many companies, including the giants Nvidia and NVDA,
and Qualcomm Qcomm,
Intel is likely involved in the packaging and/or the chip capacity seems to go somewhat unnoticed.
is reading: Intel stock isn't valued even close to its competitors
My view: It is far from a coincidence, and based on the mere scale of AI, there is a dire need to expand the capabilities and capabilities of advanced foundries in the US and other Western geographies such as Europe and Israel. This week consider an upcoming Intel party, for those who haven't been following closely.
I recently spoke with Gelsinger ahead of Wednesday's Intel event. Although he didn't comment directly on what Altman or Raimondo would talk about, the Intel CEO hinted at the incredible scope of AI, performance scales, and power management that will be needed over the next decade. To me, it's clear that there's an ideal opportunity here for Intel, government policymakers, and Altman to collaborate on meeting the need for AI semiconductors. Intel is a willing and ideal partner.
The technology industry, more specifically the semiconductor industry, and US policy leaders see the enormous value in a powerful US-based foundry for cutting-edge AI chips. Intel is the only company that has come forward to do this for the West. The Taiwanese semiconductor company certainly has a big role to play, but to build the capacity for future AI chips, Intel's moment is just that.
Daniel Newman is CEO and Principal Analyst at Futurum Group, which provides or has provided research, analysis, consulting or consulting for Intel, ServiceNow, NVIDIA, Microsoft, Amazon, IBM, Oracle and other technology companies. Neither he nor the company had any positions in any of the other companies mentioned. Follow Newman on X@danielnewmanUV.
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