Intel ACTUAL Plans for Survival, Foundry, and Recovery
Updated: Intel announced capex cut yesterday 2/21/23. This essentially will confirm my previous capex forecast made 1 year ago.
- Intel has made many aggressive commitments and strategy changes on new business model
o
IDM2.0. Commitment to have large (#2 overall) wafer foundry
business
o
Upgrade all existing sites for Intel 7,4,3. ADD 6 to 8 new fabs
for foundry
o
5 nodes in 4 years. So far Intel have delivered 1 node in 2
years so now we need 4 nodes in 2 years (4,3,20,18)
·
Intel cash flow, market share loss and overall soft market is
making those plans impossible
o
Intel historically does not lose money and does not have
negative FCF. They do now
o
This makes funding fabs even with subsidies and JV partnerships
difficult.
o
When the smoke clears we will see that semiconductor spending
increased in 2022, and 2023 decrease for year as whole will be less than 5%. But
Intel share losses and lack of growth in new areas has cut revenue and eliminated
profit and positive cash flow
o
Intel is outsourcing more chips than ever to lower costs. Meteor
Lake and Granite Rapids products are mostly non-Intel chips
o
End result is that Intel doesn’t need ANY new Fabs for Internal
work and is not a priority for equipment vendors.
·
The public plan stated is unlikely to be what will actually
happen. What we expect (Most of this was predicted in early 2022):
o
Intel will tool out and expand Arizona, Oregon, Ireland and
Israel Fabs for Intel 7,4,3
o
Intel will complete and tool out 1 new Fab in Arizona by 2024.
The other Arizona Fab will not be tooled out until demand is shown. This may lead to Intel payments to Brookfield Capital and tension in their relationship per contract details
o
Ohio will be “slow walked” with a new timeline and new
milestones.
o
Other announced sites and factories will be “dependent on macro trends”
o
Macro has almost nothing to do with it. It will be dependent on
whether Intel can develop a competitive GAA technology and have internal and foundry
demand to fill the factory. Macro is a +/- 5% impact. Intel execution is +/-
30% impact on revenue.
o
Intel Foundry “Commitments” are <1 Fab right now. It is not clear how they increase commitments
·
We show what potential scenarios are with the most likely
scenario detailed for you
o
Intels new Capex plans aligns with the fab roadmap strategy we will
show
· While Intel IDM2.0 strategy is not likely to be
successful based on current data, Intel will recover to be a successful company
again by focusing on where they ACTUALLY add value (This will be just like the
IBM Journey 10-20 years ago)
· Most importantly, we tell you how you can track progress and changes to strategy yourself over time
JOIN OUR ZOOM MEETING. We discuss details and questions on what will happen in the next 1-5 years
Intel
Future: Tuesday 2/21 3PM Pacific Time (30 Minutes+questions)
828 0396 9706 Passcode 021289
Intel
Future: Wed 2/22 5:30PM Pacific Time (30 Minutes)
817 1243 6496 Passcode 773007
We are
free to meet by zoom or in person in San Francisco. text us for a appointment
Mark
Webb
MKW
Ventures Consulting
No comments:
Post a Comment