Reuters dive into the story is really pretty good. Lots of over-promising and under/mis-delivering.
The bet on which Gelsinger staked Intel’s future came less than two months into his tenure: a global foundry that could vie with TSMC. In March 2021, he promised to invest $20 billion in two Arizona factories. That July, he said Intel also would develop five manufacturing processes in four years. Among them was 18A, a bundle of technologies under development that he hoped would restore Intel’s manufacturing excellence.
Gelsinger pushed for Congress to subsidize American chip manufacturing. In January 2022, he stood with Biden to announce another $20 billion for two factories in Ohio. Gelsinger told Reuters at the time that Intel’s commitment in the state might reach $100 billion to create “the largest semiconductor manufacturing location on the planet.”
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Gelsinger was optimistic with clients, too. He oversaw a deal to build custom chips for Alphabet’s growing fleet of Waymo self-driving taxis, set to roll out across the U.S., three people familiar with the previously unreported plans told Reuters. Gelsinger personally discussed the deal with Sundar Pichai, Alphabet’s CEO, two of the people said.But after Intel’s outlook worsened in 2022, the company canceled the Waymo deal, the two people said, and paid a fee to Alphabet after Alphabet threatened legal action.
Sandra Rivera, who formerly ran Intel’s data center group and is now CEO of Intel-owned Altera, said in an interview that her team cut the Waymo project after a corporate reorganization required her to make “decisions about the entire portfolio.”
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At times, Gelsinger has told leaders at major clients that Intel could furnish alternatives to Nvidia’s GPUs, said three people familiar with the talks – including for Microsoft and Amazon Web Services, two of them said. When customers sought details, Intel managers had little to show and some deals didn’t happen, the sources said.
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Some customers have been disappointed by what they’ve seen of 18A.When one big prospect, chip and software company Broadcom (AVGO.O), opens new tab, sent foot-wide wafers through Intel’s 18A process, the process was not ready for high-volume production for external customers, Reuters reported in September. No more than 20% of the chips printed via 18A passed Broadcom’s early tests, two people briefed on the results said. That is low compared to TSMC’s early-stage yields.
Broadcom told Reuters it has “not concluded” its evaluation of whether to use Intel’s foundry.
On the day of the Reuters report in September, Intel issued a statement saying it was on track to launch 18A in 2025 and had released tools for partners and customers to plan chips for the process.
A recent planning document produced by an Intel supplier indicates delays, however. The document, seen by Reuters, noted the supplier is still waiting to receive another digital design kit it needs to push ahead. It also lacked access to Intel factories, a person with knowledge of the situation said. Customers have little prospect of making chips in high volume with the 18A process until 2026, two people said.
Apple (AAPL.O), opens new tab and Qualcomm (QCOM.O), opens new tab, among other potential clients, have passed on 18A for technical reasons, three people with knowledge of their decisions said. Both companies declined to comment.