The Financial Reality behind Intel’s IDM 2.0

Photo above: Intel’s Fab 34 in Leixlip, Ireland. $200 million for each EUV Lithography machine

In March 2021, Intel embraced the IDM 2.0 strategy and established Intel Foundry Services as the strategic wing that leads multi-billion dollar in investments throughout Europe and the USA. When this move was first announced, it was seen as a direct threat to TSMC – the world’s largest semiconductor contract manufacturing services provider. This was mainly due to Pat Gelsinger, Intel’s CEO and the shaper of IDM 2.0 strategy, stating multiple times that Intel’s goal is to become the world’s most prominent manufacturing services provider.

The idea seemed unreasonable: why would a genuine semiconductor manufacturer who sells their own processors for high-profit margins shift to another business model – a manufacturing services provider with much lower profit margins? The investors also did not find the idea exciting. In March 2021, Intel’s shares were traded at $64 on NASDAQ. Currently, the shares are worth $35.5 with a market cap of $149 billion.

However, Techtime’s visit to Intel’s new factory in Ireland, Fab 34, reveals that the reason behind the new move is technological rather than merely business. To be more precise, the enormous cost of shifting to advanced manufacturing processes.

€17 billion and five years to set up

Last week, Intel inaugurated Fab 34 in Leixlip, Ireland, which brings Intel 4 technology (equivalent to 7nm) to Europe. It is also the first use of EUV (Extreme Ultraviolet) technology in high-volume manufacturing (HVM) in Europe. The construction of the new fab had began in 2019 and had required €17 billion investments. To provide a point of comparison, Intel operates 3 more fabs in its Leixlip campus that use older technologies, and these factories cost a combined total of €13 billion.

It means that building a fab with the latest technology, such as EUV lithography machines, would be a significant financial undertaking. Industry experts suggest that a factory like this would require 10-20 EUV lithography machines, which are only produced by the Dutch company ASML. Each EUV lithography system costs approximately $200 million.

Inside Fab 34 in Leixlip, Ireland. Credit: Intel
Inside Fab 34 in Leixlip, Ireland. Credit: Intel

The construction of the new factory demands using novell chemical materials for the production of RibbonFET transistors, acquiring new and spcialized equipment and process control and measurements, and a significantly larger clean room that meets higher standards. It is improbable that a single company that bears these expenses and only sells its own products would be able to market them at a profitable price. This is why there are only three companies toady active in advanced processes chips: Samsung, TSMC, and Intel. GlobalFoundries was the last independent firm to be involved in this competition, but it withdrew in 2018.

Intel follows Samsung’s model

Samsung, who acknowledged this challenge earlier, developed a business model for producing self-designed chips together with providing manufacturing services to its competitors, such as Apple and Qualcomm. There are also other companies that embraced this approach, although they are not taking part in the advanced technology race. French STMicroelectronics, for instance, has also adopted this approach by balancing production costs by providing manufacturing services to clients like Mobileye.

Intel’s recent move leaves TSMC as the only company solely focused on providing manufacturing services. Currently, TSMC is the primary supplier of advanced chips to Intel’s largest competitors, including AMD and Nvidia. The conclusion is that Intel’s business model does not pose a threat to TSMC, and there is no indication that Intel intends to compete with TSMC. In fact, Intel has taken significant measures to mitigate the risks associated with transitioning to advanced manufacturing processes.

This is crucial if Intel wants to maintain its position as a market leader. During the recent inauguration ceremony in Ireland, Dr. Ann Kelleher, Intel’s VP and general manager of Technology Development, announced that the company is currently developing four new processes: Intel 3, Intel A20, Intel A18, and the cutting-edge Intel Next. Kelleher stated that the company’s goal is to achieve one trillion transistors in a chip by 2030.

Chiplets require an Open Production Floor

The financial revolution is being accelerated by the move towards hybrid components that consist of several Chiplets; each produced using a different process. This shift creates a new business model where modern processors no longer rely on a single CPU chip but instead integrate multiple peripheral chips from other manufacturers onto an advanced substrate that connects numerous tiles.

Intel's Meteor Lake chips. 25% made by Intel, %75 by TSMC
Intel’s Meteor Lake chips. 25% made by Intel, %75 by TSMC

This concept is similar to the IP Model prevalent in the Chip Design industry, where any SoC contains the manufacturer’s own proprietary module, along with multiple intellectual property (IP) modules designed by specialized firms. Adopting multi-tile components expands the IP model to the Hardware Level. But it requires to adjust the nature of production lines. Intel, for instance, utilizes this approach in its new chip, Meteor Lake, where 75% of the surface area of the silicon tiles is manufactured by TSMC, and only 25% by Intel.

This shift necessitates the management of an open production floor that can accommodate tiles produced by other manufacturers while producing their own. It also requires the integration of foreign silicon into Intel’s components and the transfer of Intel’s silicon into other vendors’ components, even if they are direct competitors. To achieve this, Intel appears to have chosen a production model that combines self-development and production, side by side with providing manufacturing services.

The Chinese model travels West

Fab 34 project also reveals the importance role of national governments in the semiconductor industry. The cost of transitioning to advanced processes is so high that even major companies like Intel require government incentives. Similar to the Chinese approach, public funding is used to support production firms and boost local industries that rely on advanced technology to create more jobs.

This is why countries like Ireland and Israel are appealing, and why the CHIPS Act and Science Act drive the build-up of new fabs in the US. Intel is also awaiting now to receive approvals from the EU before it will move to the construction phase of its next European fabs: A wafer fabrication facility in Magdeburg, Germany, and an assembly and test facility in Wrocław, Poland.

Translated by P. Ofer

StoreDot and Volvo to develop Fast Charging Batteries

Herzeliya (Israel) based StoreDot, has signed a multi-year agreement with Volvo Cars to develop an optimized battery for the next generation Volvo cars. This collaboration, with experts from Volvo Cars and StoreDot working together, is aimed to develop extreme fast charging (XFC) battery cells, optimized and tailored for Volvo’s future electric vehicle architectures. It is expected that the first samples will be delivered for testing next year.

Volvo Cars is already a strategic investor in StoreDot, but this newly agreed collaboration takes the relationship a step further. Dr. Doron Myersdorf, StoreDot CEO, said it is a highly significant agreement for StoreDot. “Our teams are now working together developing B-sample cells for Volvo Cars’ next generation fully electric architectures. The goal is to enable Volvo Cars’ customers to benefit from our XFC battery technology, which enables 100 miles of range in just five minutes of charging.”

StoreDot has developed a unicque Extreme Fast Charging batteries for electric vehicles . It has revolutionized the conventional Li-ion battery by synthesizing proprietary organic and inorganic compounds, enabling to achieve very fast charging. In 2022, the company achieved a world first by demonstrating a live extreme fast charging of an EV battery cell in just 10 minutes.

Recently StoreDot reported performance feedback for the evaluation and integration A-Samples testing phase of its XFC electric vehicle battery cells. The comprehensive testing programs took place earlier this year by 15 leading global automotive brand manufacturers from Europe, Asia, and the US, as well as several of StoreDot’s strategic ecosystem partners.

Stratasys and Desktop Metal’s Merger was Terminated

The previously announced $1.8 billion merger between the two Additive Manufacturing Solutions providers, Stratasys and Desktop Metal, has been terminated after Stratasys’ shareholders rejected the deal during an extraordinary general meeting held last week. Following the resolution, Stratasys announced that its Board of Directors has initiated a process to explore strategic alternatives for the company, that may include a strategic transaction, potential merger, business combination or sale, or other. Additionally, Stratasys’ shareholder rights plan (“Poison Pill”) was extended for three more months.

Stratasys re-activated the Rights Plan in order to prevent hostile takeover, following purchace attempts made by Nano Dimensions and 3D Systems. Since June 2023, Stratasys has received multiple unsolicited proposals from 3D Systems, which was rejected by the board. But the termination of Desktop Metal’s deal provides new opprtunities in this direction. 3D Systems issued a statement regarding Stratasys’ process to explore strategic alternatives, saing that its merger agreement proposal expires on October 5, 2023. “3D Systems is willing to amend its current binding proposal to include a 60-day go-shop period. During this period, Stratasys would be permitted to actively solicit alternative proposals to acquire Stratasys.”

President and CEO of 3D Systems, Dr. Jeffrey Graves stated, “We continue to believe that a combination between 3D Systems and Stratasys presents the most attractive opportunity for Stratasys shareholders and the additive manufacturing industry at large. This amendment reflects our confidence in the superior value of our proposal and our belief that the market has already had more than enough time to evaluate interest in Stratasys, which has already yielded ten offers for Stratasys in the last six months.”

Stratasys provides 3D printing solutions based on polymer materials for industries such as aerospace, automotive, consumer products, healthcare, fashion and education. Its revenues for H1 2023 totalled $210 million, compared with $229 million in H1 2022. 3D Systems offers to buy Stratasys at a price tag of $27 per share. Today the company is traded in NASDAQ for $13.1 per ordinary share.

NeuReality’s First AI Inference Server-on-a-Chip Validated and moved to Production

NeuReality’s 7nm AI-centric NR1 chip moved its final, validated design to TSMC manufacturing, creating the world’s first AI-centric server-on-a-chip (SOC). A major step for the semiconductor industry, NeuReality will transform AI inference solutions used in a wide range of applications – from natural language processing and computer vision to speech recognition and recommendation systems.

With the mass deployment of AI as a service (AIaaS) and infrastructure-hungry applications such as ChatGPT, NeuReality’s solution is crucial for an industry urgently in need of affordable access to modernized, AI inference infrastructure. In trials with AI-centric server systems, NeuReality’s NR1 chip demonstrated 10 times the performance at the same cost when compared to conventional CPU-centric systems. These remarkable results signal NeuReality’s technology as a bellwether for achieving cost-effective, highly-efficient execution of AI inference.

AI Inference traditionally requires significant software activity at eye-watering costs.  NeuReality’s final steps from validated design to manufacturing – known in the industry as “tape-out” – signals a new era of highly integrated, highly scalable AI-centric server architecture.

The NR1 chip represents the world’s first NAPU (or Network Addressable Processing Unit) and will be seen as an antidote to an outdated CPU-centric approach for inference AI, according to Moshe Tanach, Co-Founder and CEO of NeuReality. “In order for Inference-specific deep learning accelerators (DLA) to perform at full capacity, free of existing system bottlenecks and high overheads, our solution stack, coupled with any DLA technology out there, enables AI service requests to be processed faster and more efficiently, ” said Tanach.

“Function for function, hardware runs faster and parallelizes much more than software. As an industry, we’ve proven this model, offloading the deep learning processing function from CPUs to DLAs such as the GPU or ASIC solutions. As in Amdahl’s law, it is time to shift the acceleration focus to the other functions of the system to optimize the whole AI inference processing. NR1 offers an unprecedented competitive alternative to today’s general-purpose server solutions, setting a new standard for the direction our industry must take to fully support the AI Digital Age.” added Tanach.

NeuReality is moving the dial for the industry, empowering the transition from a largely software centric approach to a hardware offloading approach where multiple NR1 chips work in parallel to easily avoid system bottlenecks. Each NR1 chip is a network-attached heterogeneous compute device with multiple tiers of programmable compute engines including PCIe interface to host any DLA; an embedded Network Interface controller (NIC) and an embedded AI-hypervisor, a hardware-based sequencer that controls the compute engines and shifts data structures between them. Hardware acceleration throughout NeuReality’s automated SDK flow lowers the barrier to entry for small, medium, and large organizations that need excellent performance, low power consumption and affordable infrastructure – as well as ease of use for inferencing AI services.

“We are excited about our first generation NAPU product, proven, tested, and ready to move to manufacture. It’s full steam ahead as we reach this highly anticipated manufacturing stage with our TSMC partners. Our plan remains to start shipping product directly to customers by the end of the year,” says Tanach

NeoLogic Unveils Novel Processor Design Technology at 16nm, Promising Significant Power, Cost, and Area Reductions

Israeli processor technology startup NeoLogic is launching a groundbreaking processor design technology that is poised to revolutionize chip design. The company expects to tapeout an ARM processor at 16 nanometers for demonstration this December. The technology and the processor will be available for evaluation to key selected customers.

NeoLogic’s Quasi-CMOS technology serves as a platform for processor design. It delivers high computing power in tandem with reduced power consumption and cost.

The company has completed the development of new, non-existing, standard cells for the 16nm technology node, on top of the existing CMOS standard cells library. NeoLogic’s standard cells are single-stage high fan-in (8 to 16 inputs), among others, leading to up to 50% reduction in power consumption compared to the most advanced equivalent CMOS cells while saving up to 40% of the area.

The technology was conceived to address the increasing workloads in data centers and the need to reduce the high costs associated with developing processors using advanced technology nodes. Designing processors with Quasi-CMOS delivers superior computing power per watt per millimeter square, catering to the escalating workloads of artificial intelligence, machine learning, data analysis, video streaming, and more in data centers.

CMOS technology, which has been the “workhorse” of processor design and fabrication for the past 40 years, is nearing its limits and is challenging to improve. Quasi-CMOS breaks through these limitations by significantly increasing the maximum number of inputs of standard cells and by changing their topology to reduce the number of transistors. This breakthrough benefits the logic synthesis as well as the physical design.

Dr. Avi Messica, Co-founder and CEO of NeoLogic, stated: “Utilizing Quasi-CMOS for processor development delivers a technological leap in performance. Our design technology enables us to design a 16nm processor that delivers performance equivalent to more advanced – sub 16nm – technology nodes, while saving development (NRE) and manufacturing (OPEX) costs. Reducing the processor’s power consumption in data centers leads to significant cost savings (cooling, electricity, infrastructure).”

NeoLogic, which recently secured an 8-million-dollar seed funding, was founded in 2021 by Dr. Avi Messica (CEO) and Ziv Leshem (CTO), both of whom have decades of experience in R&D and management of microprocessors design and fabrication. Dr. Avi Messica (Ph.D. Weizmann Institute of Science) is an expert in solid-state physics and quantum devices and in ultrafast transistors in particular with 26 years of managerial experience in a variety of hi-tech companies. Messica previously served as a device group manager at Tower Semiconductors and has hands-on experience in the design and fabrication of CMOS devices. He also served as VP of Engineering at Shellcase and founded and served as the CEO of three semiconductor companies in the fields of image sensors, MEMS-based optical switches, and photonic chips.

Ziv Leshem has 25 years of experience in processor design. He worked for some of the world’s leading semiconductor companies, such as National Semiconductors, DSPG, and Synopsys, and managed complex processor design projects. He was one of the founders of LogixL, a company that developed a hardware-based HDL simulator and also served as a manager at NewSight Imaging, a developer of LiDAR and iTOF sensors. Before founding NeoLogic he was the manager of the physical design group at Inomize where he managed a group of engineers and developed processors for customers in various industrial sectors in CMOS technologies ranging from 40nm to 7nm.

SatixFy to sell its Satellite Payload Division

SatixFy Communications from Rehovot, Israel, announced  a $60 million transaction with Canada based MDA Ltd. The deal is a combination of a $40 million share purchase agreement, selling SatixFy Space Systems UK to MDA as well as an additional $20 million in advanced payments under new commercial agreements which includes the previous $10 million advanced payment made in June to be applied to future orders of chips.

SatixFy will continue to retain all its related ASIC intellectual property and new chips’ development for satellite digital payloads. The transaction is expected to occur in the fourth quarter of 2023. Nir Barkan, Acting CEO of SatixFy, said the company has recently took a strategic decision to focus on its core competencies of developing and providing novell chipsets supporting multi beam digital antennas and on board processing for the space industry and advanced ground terminals.

SatixFy develops end-to-end digital satellite communications systems: satellite payloads, user terminals and modems, based on powerful chipsets that it develops in house. It products are based on Software Defined Radio (SDR), Fully Electronically Steered Multi Beam Antennas (ESMA) and Beamforming that support the advanced communications standard DVB-S2X. The deal aimed to support a recovery process after SatixFy’S 2022 revenues had dropped to $10.6 million, compared with $21.7 million in 2021.

Intel and Tower Announce Foundry Agreement

Photo above: Intel’s Fab 11X in Rio Rancho, New Mexico. Credit: Intel Inc.

Less than a month after the termination of a planned merger between Intel and Tower Seniconductor, the two companies announced a largescale production agreement: Intel will provide foundry services and 300mm manufacturing capacity to help Tower serve its customers globally. Tower will utilize Intel’s manufacturing facility in Rio Rancho, New Mexico (Fab 11X), and will invest up to $300 million to acquire and own equipment and other fixed assets to be installed in the facility.

The rearranement of the fab will provide production capacity of over 600,000 photo layers per month. Intel will manufacture Tower’s 65-nanometer power management BCD (bipolar-CMOS-DMOS) and radio frequency silicon on insulator (RF SOI) solutions flows. Stuart Pann, Intel senior vice president and general manager of Intel Foundry Services (IFS) explained during Goldman Sachs Communacopia & Technology Conference this week, that intel had unused capacity in Fab 11X, because it is an older factory for older technologies.

Initial Production in 2025

Pann: “We found a way to do contract manufacturing to take advantage of that extra space. Those older tools that we aren’t using, taking some investment from Tower to finish out the line.” The parties plan to achieve full process flow qualification in 2024, and to begin with full mass production in 2025. Tower CEO Russell Ellwanger said: “We see this collaboration as a first step towards multiple unique synergistic solutions with Intel.”

Tower provides foundry services for Analog semicinductor devices. It offers a broad range of customizable process platforms such as SiGe, BiCMOS, mixed-signal/CMOS, RF CMOS, CMOS image sensor, non-imaging sensors, integrated power management (BCD and 700V), and MEMS. Tower owns two manufacturing facilities in Israel (150mm and 200mm), two in the U.S. (200mm), two facilities in Japan (200mm and 300mm) which it owns through its 51% holdings in TPSCo and is sharing with ST a 300mm manufacturing facility in Italy .