Intel Shows Signs Of Accelerating Chip Manufacturing Process

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Intel has had a hard time rolling out more advanced chip architectures lately, but that could soon change. CEO Pat Gelsinger spoke about Intel Q2 earnings during the week, saying that the 7nm process is progressing well. The company is set to announce news on how it “accelerated the annual pace of innovation with new advances in semiconductor processing and packaging” in a webcast on Monday, July 26.

The announcement comes with second-quarter earnings where Intel managed to beat expectations and posted revenue of $18.2 billion, up 2 percent year-over-year. Intel also has a rather optimistic outlook on the future. It raised its 2021 revenue expectations by $1 billion to $73.5 billion and now expects year-over-year revenue growth compared to 2020.

Intel earnings have been on an upward trend for the past few quarters despite frequent delays and shortfalls in the production of both 10nm and 7nm chips. This growth was fueled by spikes in demand for both personal computers and data center chips in 2020 due to the COVID-19 pandemic, as millions of people purchased new laptops and computers to assist with remote working and education, and increased reliance on cloud services.

And, despite the global semiconductor shortage, Intel is still on the tide, posting $10.1 billion in revenue for its customer computing group (a 6 percent year-over-year increase and a Q2 record for the company). Gelsinger said during the call that he expects shortages to bottom out in the second half of the year, but it will take another one to two years before the industry can fully meet demand.

Support for the client computing group also helped Intel to generate slower revenue than the data center group, with revenue of $6.5 billion, down 9 percent year on year. However, there are signs that the impressive growth in the PC segment is starting to slow. Both IDC and Gartner state that PC sales growth slowed significantly in Q2.

The past year has been quite turbulent for Intel. Last summer, the company had to admit that it would severely delay the upcoming 7nm architecture for its next-gen processors. This news, the company’s chief of hardware Dr. It was followed by the departure of Venkata (Murthy) Renduchintala and the replacement of CEO Bob Swan by Pat Gelsinger, a former chief technology officer and hardware engineer at the company.

Gelsinger wasted no time trying to create changes to get Intel back on track, and in March announced a new “IDM 2.0” initiative aimed at returning Intel as the industry leader in chip manufacturing. As part of this plan, the company will outsource manufacturing to competitors like TSMC and Samsung for “products at the core of Intel’s computing offerings” from 2023.

Intel is also working to launch a new subsidiary called Intel Foundry Services, which will enable it to undertake manufacturing projects for third-party companies, including a $20 billion investment to expand its manufacturing facilities in Arizona.

In light of the global semiconductor shortage, Intel Foundry Services could be a big win for the company, given the massive demand for more chip-making companies. Intel announced today that it has more than 100 potential customers interested in the service, and promised to share more news about its new venture on Monday. It will take some time for things to speed up, though.

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