Intel under Pat Gelsinger • The Register

To analyse Intel is increasing research spending to correct past mistakes, catch up and outpace the competition, and lay the foundation for future growth.

The US giant spent $15.19 billion on research and development in fiscal 2021, more than 20% of the company’s $74.7 billion in revenue. This represented a roughly 12% increase in research and investment in 2020, and was the largest year-over-year increase since 2012, when R&D spending increased by 20%.

Compare that to the past few years, when research and development spending was stagnant or barely increased and Chipzilla instead spent billions to prop up the stock price. Enter CEO Pat Gelsinger, who took the reins last year and pressed the reset button on Intel’s priorities to focus on engineering.

“Intel is investing heavily in research and development to improve its semiconductor process roadmap and also in new chip designs,” said Kevin Krewell, analyst at Tirias Research. The register.

“Gelsinger is willing to spend more to regain the lead in process and chip designs.”

The chief executive wants to rekindle Intel’s old magic as a technology leader, a status it has lost over the past decade. He identified manufacturing as a priority and increased investment in manufacturing technology, materials and packaging to support future growth.

Intel just recently announced new fabs in Columbus, Ohio that will start up in 2025 and manufacture chips up to 2nm and beyond. It is also expanding manufacturing in Arizona, Oregon and New Mexico, as well as overseas in Ireland.

Intel was years ahead of rivals in delivering important manufacturing innovations in a cost-effective way, said Jesús del Alamo, director of Microsystems Technology Laboratories at MIT. The register.

“They lost that advantage maybe six, eight years ago. That technical leadership moved to Asia — to Samsung and TSMC,” del Alamo said.

Loss of focus

Intel’s investment in research all but dried up beginning in 2013 when former COO Brian Krzanich took over as CEO, accounting for single-digit percentages of revenue. He was fired in 2018 after a consensual relationship came to light. Research investment fell in 2019 for the first time in nearly a decade under CEO Robert Swan, a former Intel chief financial officer.

“There hasn’t been the kind of breakthrough investment in the future of the company,” said David Kanter, principal analyst and chip researcher at Real World Technologies.

Swan was an accountant, not a technology visionary needed to make the huge investments in research and development to generate long-term product roadmaps and revenue, Kanter said.

At the time, Intel was beset by an inconsistent product roadmap, poor manufacturing execution, and a desire for short-term gains in markets such as mobile devices. This created an opening for Arm, AMD, Qualcomm and Apple to become more competitive.

“So when Pat came in, he basically said, ‘my goal is to make Intel great again. We will be leaders in the manufacturing and packaging of semiconductors, and in the markets in which we operate. “It requires cutting a check for research and development,” Kanter said.

The road ahead

The next inflection point in Intel’s R&D strategy is around 2024-2025, when it will begin printing chips with next-generation transistor and package technologies, which are the mainstays today. research priorities.

New technologies include gate-all-around (GAA) transistors, which will provide better transistor density and performance. Intel calls its implementation GAA RibbonFET. This involves lifting the transistor channels in the gate fin so that the gate material surrounds the channels, increasing the contact area. Intel also moves power to the back of the wafer with what it calls PowerVia technology. This could help deliver better performance and power efficiency over current setups.

Research papers presented at the International Electron Devices Meeting (IEDM) last month outlined “a long-term path to more than 10-fold density improvement in packaging and 30% improvement at 50 % of transistor scaling area,” Gelsinger said on an earnings call last week.

Intel is also investing in advanced packaging to tie together multiple process technologies and chip designs. A processor family named Lakefield, which featured Foveros packaging, was quickly canned.

Kanter said Lakefield was an indicator of Gelsinger’s strategy: a willingness to quickly test Moonshot projects in real environments so they can get to market faster.

Intel is already testing Ponte Vecchio, a GPU accelerator considered to be another lunar project bringing together the company’s most advanced technologies. The Ponte Vecchio has 47 tiles and 100 billion transistors. Rival products like Nvidia’s A100 and AMD’s MI250 accelerators also have dense packaging.

“Intel, in terms of the publicly disclosed roadmap, is doing more aggressive things than TSMC. The thing about semiconductors – it’s not just the core concept that matters, you’re going to be doing countless trials. All of this experimentation doesn’t come cheap, it has to be done,” Kanter said.

Gelsinger’s increased research spending is also a response to peculiarities related to chip shortages and advances in manufacturing. Intel, which mainly made chips for itself, will now make chips for Qualcomm. Meanwhile, TSMC manufactures some components for Intel. Technologies such as EUV and high NA EUV also require more research expenditure.

The happiest Moore

Time will tell if Gelsinger’s research and development gamble pays off. But industry watchers said Gelsinger’s reliance on Moore’s Law to advance technology and drive business strategy is fundamentally sound.

On the earnings call, Gelsinger referred to the 50th anniversary of the Intel 4004, calling it “the chip that changed the world”.

“We are committed to accelerating this impact over the next 50 years, as the insatiable need for computing that began with the 4004 continues to drive the value of Moore’s Law,” Gelsinger said.

MIT’s Del Alamo said any talk of Moore’s Law ending is overblown because people have narrowed the definition. Moore’s Law means different things to different people, but it’s still a measuring stick to drive chip innovation.

“There are huge opportunities ahead. But it becomes very expensive to seize these opportunities, because it is no longer geometric scaling. Each generation of technology involves new innovations that are very important to get there, and you have to be prepared to invest huge resources on research and development,” del Alamo said.

Intel is the last steward of academic chip research in the United States, with companies like IBM committing fewer resources. Intel is well-organized and methodical in supporting and funding research at American universities, del Alamo said, adding that he has worked with the company on projects.

“This is going to require fundamental research involving new hardware systems, new physical principles, approaches to storage and information management. It’s as exciting as ever,” del Alamo said.

Intel isn’t alone in promising record financial commitments for chip factories and research. TSMC spent [PDF] about $4.7 billion in research and development in fiscal 2021, and its capital spending is rising by a third to $44 billion this year to boost production.

Gelsinger will ultimately have to answer to shareholders for billions spent on research and development, but no semiconductor company can have a bright future without her, Pat Moorhead, principal analyst at Moor Insights and Strategy.

“All things equal, at the start, increased research and development at a higher rate of revenue expansion means lower net income. Research and development pays dividends – figuratively speaking – in the future and if Intel can convince investors it’s money well spent, it won’t become a drag on the stock,” Moorhead said. ®

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