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Intel invests $20 billion in new foundry business to compete with the likes of TSMC and Samsung

While the announcement of 7nm Intel CPUs stole headlines last night following Intel's ‘Engineering the Future' event last night, the bigger announcement is arguably Intel's decision to set up its own foundry business. Intel has used its own foundry facilities to produce chips for years now and soon, Intel will be opening up its doors to fabricate chips for other companies too.

As has been well documented over the last year, the tech industry is facing a major shortage in manufacturing and fabrication availability, which has led to numerous delays and a major lack of supply. Companies like TSMC and Samsung are producing at full capacity, leaving the door open for Intel to pick up some business from companies in need of additional production lines.

Last night, during Intel Unleashed, CEO Pat Gelsinger, announced that the company will be expanding its manufacturing facilities, putting $20 billion towards the cause. That money will lead to two new fabs based in Arizona, USA. These fabs will supply chips for the US and European markets.

As part of the announcement, Intel states: “IFS will be differentiated from other foundry offerings with a combination of leading-edge process technology and packaging, committed capacity in the U.S. and Europe, and a world-class IP portfolio for customers, including x86 cores as well as ARM and RISC-V ecosystem IPs.”

Intel CEO, Pat Gelsinger, expands on this announcement, stating: “A key challenge is access to manufacturing capacity. Intel is in a unique position to rise to the occasion and meet this growing demand while ensuring a sustainable and secure supply of semiconductors for the world”.

Of course, Intel isn't just doing this to bolster a currently struggling industry – there is an awful lot of money to be made here. By Intel's estimations, the silicon manufacturing market will be worth $100 billion by 2025 and the company plans to take a significant piece of that market share by offering manufacturing services to third-parties.

Once Intel's new IFS initiative is all set up and rolling, the company aims to compete heavily against the likes of TSMC and Samsung, both of which manufacture chips for some of the biggest names in the tech industry, including Apple, Qualcomm, AMD, Nvidia and others.

KitGuru Says: Semiconductor foundries take years to build and set up, so this is very much a long-term plan. We aren't going to see supply shortages solved this year, but this will help the industry moving forward.

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