Pat Gelsinger, who left for VMware from Intel, took the first step back by taking office as Intel CEO on the 15th (US local time). It’s been a month since the Intel board of directors announced on the 13th of last month to sign Pat Gelsinger.
Pat Gelsinger, inaugurated on the 15th, said, “As a new CEO, I am very thrilled to have the opportunity to regain the great icon of the company that has played an important role in all aspects of technology development and make it a leader of the future. It is in front of us.”
However, there are a number of urgent matters to be decided, such as the 7nm process processor production plan, manpower expansion, and future roadmap.
■ The urgent need to decide on 7nm processor internal/external production
At the beginning of this year, Intel was planning to announce detailed plans for the 7nm process through the 4Q 2020 earnings release. But with Pat Gelsinger’s return as CEO, various important decisions have been suspended.
The first task that Pat Gelsinger must solve is the allocation of processors to be produced in the 7nm process in 2023. You have to decide which products will be produced internally and how much will be commissioned by an external foundry.
Pat Gelsinger also mentioned, “We will disclose the details of the use of external foundries after (I) formally take office as the CEO.”
TSMC and Samsung Electronics are cited as companies that can consign Intel processors. However, not only Intel, but also other companies such as Apple, Qualcomm, and AMD are rushing to TSMC. Considering this, it is necessary to secure production volumes at least one year before production.
■’Homework’ to expand manpower related to processor and microprocessing
One of Pat Gelsinger’s tasks is the recruitment of heavy personnel to research and develop core products such as processors and production processes.
In November 2017, when Brian Krzanich was in office, Raja Koduriga, a graphics expert who went through Apple and AMD, and Jim Keller, a processor expert through AMD, Tesla, and Apple, joined Intel in April 2018.
However, Jim Keller left Intel for personal reasons in June of last year and moved to a Canadian AI chip startup earlier this year. Currently, Raja Koduri is the senior vice president and oversees the development of all products including processors, graphics chipsets, and software.
After Pat Gelsinger announced his intention to return to Intel, experts who have been with Intel for more than 30 years have expressed their intention to return. However, the recruitment of experts related to microprocessing, which was the decisive cause of Intel’s stagnation, is relatively inconspicuous.
Mercy Renduchintala, who was recruited from Qualcomm in 2016, was in charge of the client chip and IoT business, but left Intel in August last year, just after Intel announced a delay in the 7nm process. Since then, the development of technology related to microprocessing is under the direction of Anne Keller, Senior Vice President (Doctor).
■ The fundamental problem of’fine process’ still hot potatoes
The trial and error related to microprocessing below 7nm, which is the root cause of AMD’s pursuit and Apple’s departure, has not been resolved at all. Intel announced last month’s earnings release that the 7nm process will recover, but the stock market has not raised doubts.
Intel’s share price remained at $60 per share (about 72,000 won) until just before the July earnings announcement last year, but fell to $45 (about 50,000 won) at the end of October. On the other hand, its rival AMD’s share price has continued to rise since July of last year, and is currently trading at more than $90 per share (about KRW 100,000).
Late last year, the American activist fund’Third Point’ sent a letter to Intel asking Intel to consider a plan to separate semiconductor design and manufacturing. After that, when Pat Gelsinger’s return was officially announced in mid-January last year, the stock price recovered to the $60 mark.
However, this is close to the’convention effect’ produced by the positive outlook of the CEO change. In addition, it is difficult to give up its own semiconductor production prematurely, as some investors demand.
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Since the second half of 2018, Intel has suffered a shortage in the supply and demand of processors produced in the 14nm process for about a year and a half. Afterwards, it managed to solve this through adjustment of production facilities and new investments. Competitors, AMD, entrusted the production of products to TSMC and obtained the 7nm process, but from last year, all products such as Ryzen processors and Radeon graphics chipsets are suffering from shortages.
In addition, the newly launched Biden administration is making a move to deal with the stable production of semiconductor products at the level of national security. If the production of semiconductor products is completely turned over to Taiwan or China, not the United States, friction with the Biden administration is also inevitable.