Former CHIPS Program Officials Highlight Intel Foundry's External Customer Challenge Amidst $19.5 Billion US Deal

Washington D.C. – Two former executives who previously led the CHIPS Program Office have voiced concerns that the substantial U.S. government support for Intel may not resolve the core issue facing its foundry unit: a critical shortage of external customers. Todd Fisher and Mike Schmidt, who oversaw the implementation of the CHIPS Act, argue that attracting major fabless chip designers remains Intel's primary hurdle, as reported by the Wall Street Journal.

Intel recently secured a preliminary memorandum of terms from the U.S. Commerce Department, promising up to $8.5 billion in grants and $11 billion in loans under the CHIPS and Science Act. This significant funding, totaling $19.5 billion, is intended to bolster Intel's ambitious plans to expand its domestic chip manufacturing capacity across Arizona, New Mexico, Ohio, and Oregon. The investment aims to catalyze over $100 billion in private sector spending.

However, Fisher and Schmidt contend that financial aid alone will not guarantee the success of Intel Foundry Services (IFS). They emphasize that Intel's historical focus on manufacturing its own chips presents a challenge in transitioning to a pure-play foundry model, where trust and reliability for third-party clients are paramount. The executives suggest Intel must prove its capability to serve companies like Nvidia and Qualcomm, which predominantly rely on established foundries.

Intel Foundry Services, launched as a strategic initiative, aims to compete with industry leaders such as Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung. The ability to secure a diverse portfolio of external customers is crucial for IFS's long-term viability and for the broader U.S. goal of re-shoring semiconductor production. Industry analysts echo these sentiments, highlighting the competitive landscape and the need for Intel to build robust relationships beyond its internal chip production.