Intel’s plight: Implications for nation’s security?
In March of this year, the Electronic Design website had reported Intel saying it’s business as usual with the chip company meeting over 90-percent of orders on time.
Despite them losing their lead in advanced chip production to Taiwanese TSMC, Intel CEO Bob Swan had said, “We’re continuing to add capacity so we’re not constraining our customers growth. In the same January conference call to analysts, Swan said, “Our near-term challenge is working with our customers to support their desired product mix,” although another media outlet, Bloomberg, reported he also warned of another delayed production process, and that Intel is prepared to execute a contingency plan of ‘using somebody else’s process technology’, if it ever comes to that.
Many things have changed since March.
Three months after a gruelling pandemic period in the United States, the media’s perception is that Intel’s in-house production is moving nowhere. Swan even shared that the company was evaluating using other companies’ chip foundries, instead of only its own.
Echoing that decision is the announcement of Intel’s chief engineering officer’s resignation this week, according to CNBC. Venkata ‘Murthy’ Renduchintala joined Intel from Qualcomm in 2015, and his most recent role saw him overseeing technology, engineering and manufacturing.
In the bigger scheme of things, Intel’s announcement that it is weighing the decision to outsource their chip designs to Asia rivals, has sent shockwaves throughout the industry.
Implications for national security?
Asia Times reported mere two days before Swan’s announcement, that an amendment to the National Defense Authorization Act was passed, which provides federal subsidies for semiconductor manufacturing. The reason behind this was shared on July 21st 2020, when the Semiconductor Industry Association declared the Congress has strategic opportunity to strengthen the US semiconductor manufacturing and research, two crucial drivers of America’s economic strength, national security, and supply chain resilience.
Once seen to be leading the chip production industry, one of the early sign of trouble for Intel came in 2018 when TMSC came from behind and came very close to toppling Intel from the throne. Today, Intel’s 10-nanometer process technology is three years off target in delivering commercial products, and the latest 7-nanometer processor technology (by TSMC and Samsung) has already been in production since 2018.
The Asia Time’s David Goldman aptly described, “Silicon is to military powers of the 21st century what steel was to the militaries of the 19th centuries. Smart weapons depend on secure chips, and a country that cannot make its own semiconductors would be like a 19th century power that couldn’t cast its own cannon.”
In other processor industry news, Softbank-owned British chip design unit, Arm, is in talks to be sold to Santa Clara-based Nvidia. Arm currently holds over 90-percent market share in core design architecture for mobile processors.