Intel chief executive Lip-Bu Tan said Chipzilla’s foundry business is a “national treasure” and claimed customers are lining up for its advanced packaging and process technologies.
During CNBC’s Mad Money show with host Jim Cramer, Tan talked up Chipzilla’s foundry outfit and said AI hype is pushing more customers towards it.
Tan said that “Foundry is very important,” and called it a national treasure. He said that more than 90 per cent of the most advanced processors are manufactured outside the US.
Bringing production back to the US is not exactly a walk in the park. Chipzilla has been backed by US President Donald Trump, with Tan saying Trump is one of his biggest supporters.
That can be linked to recent TeraFab and the Fruity Cargo Cult Apple deals, where Chipzilla landed multi-year chipmaking agreements. Both outfits will use Chipzilla’s latest foundry technologies for upcoming products.
He said he worked with partners to fix the shortcomings and bring yield improvements closer to the industry standard of seven to eight per cent a month. The results are starting to show. Chipzilla’s 18A process is now ramping, with Panther Lake CPUs set for a big volume increase in the coming months.
That has cheered Tan and outside partners, who are now asking whether 18A can be opened up to them, too.
“Yeah, I think the Foundry is very important, actually, it is one of the key national treasures because 90 plus per cent of the most advanced processors are manufactured outside the country. So I think it’s important to bring some of them back,” Tan said.
“And then when I took over the 18A, the yield was not good. And I had to ask some of the ecosystem partners to help me review the data and identify ways to improve. The industry standard, the best practice, is to see seven or eight per cent yield improvement per month. And now I’m seeing it. And then the other part is supposed to be at the yield performance, defect density, you know, at the end of the year to see that particular target. And now I was so happy. Now I see that before even the end of the year.
“So that is a very big encouragement for me. And that’s why Panther Lake, we can ship in volume now. And then now some of the customers, I think, to knock on my door. Now we hear that you’re making great progress. Can you also open up for outside customers to do that,” Tan said.
Chipzilla is seeing big interest from external customers and is already dealing with several firms. Tan said he will not name customers, which is handy when the rumour mill is doing the job for him.
“Yeah, first of all, in my personal policy, I don’t disclose of a customer. But you can draw the line, look at the customer from Intel, from Cadence, some of them, they trust me, they want to work with me,” Tan said.
Tan pointed to 14A, Chipzilla’s upcoming process node designed mainly for external customers alongside the 18A-P node. Chipzilla calls 14A its most advanced process technology so far. It measures 1.4nm, with risk production planned for 2028 and volume production in 2029.
Apple is said to be one of the customers expected to use 14A. Elon Musk’s TeraFab is expected to use it for its own AI chips.
Tan reckons Chipzilla will go up against TSMC’s 1.4nm technology at the same time. He called it a “major breakthrough” and said multiple customers are engaged on 14A, with PDK 0.5 already available.
“And then the other part, the most advanced, is 14A. This is 1.4 nanometer. This is the most advanced. And then, to be candid with you, 2028, we will have risk production. 2029 will be volume production. It will be the same time as TSMC. So that is a major, major breakthrough. And so I’m excited. And we already have multiple customers engaged with us. We have 0.5 PDK available,” Tan said.
Tan talked up EMIB, calling it one of the most advanced and best chip packaging technologies. EMIB was recently said to have reached 90 per cent yields.
Chipzilla is trying to push EMIB into volume production with reliable yields, so external customers can trust it without clutching their pearls.
“This is the next generation of advanced packaging, and that we have really the best technology. And now we try to make sure that we can bring it into volume production with a reliable yield so the customer can count on us. And in fact, a couple of customers even prepaid some of the substrate for me. And because right now, substrate has become a very tight supply chain. So I need to put money to secure this material. And then right now the customer supports me to pay some of the advance, that shows that commitment to me,” Tan said.
Substrates are becoming a nasty bottleneck. Without one, the chip has nowhere to sit, which tends to spoil the magic. Ajinomoto has reportedly run short of ABF substrates and is hiking prices amid ongoing supply constraints that are squeezing the industry.
CPU demand has exploded too, with Chipzilla even reusing weaker dies to meet demand. Tan said one customer asked to triple its forecast overnight.
“No, actually, you have to take a step because, for example, overnight, I have one customer. So basically, we give you the forecast for this year, but we want to increase it by a factor of three. And I say I can’t do it overnight, give me a few quarters, I will catch up with you. So I think in a way, this demand is not short-term, it’s the next couple of years,” Tan said.
