Why Intel's Foundry Plans Don't Make Any Sense
Intel (NASDAQ: INTC) recently launched Intel Foundry Services, a new division of its internal foundry that will manufacture third-party chips. It kicked off that expansion with a $20 billion investment in two new foundries in Arizona, and it plans to build more plants across the U.S. and Europe.
Intel has engaged with more than 50 "potential" customers for the Foundry Services business so far, and it believes its plants can help alleviate the global chip shortage. The Biden administration's plan to spend $50 billion on expanding America's domestic chipmaking sector could also support Intel's ambitions.
Intel considers this expansion to be a crucial part of the IDM (Integrated Device Manufacturer) 2.0 strategy it unveiled in March. With that plan, Intel's new CEO Pat Gelsinger shut down the idea that the company needed to transition to a "fabless" model like Advanced Micro Devices (NASDAQ: AMD) and outsource the production of its chips to a third-party foundry.
Source Fool.com
