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Intel Breaks Ground on $20-Billion Arizona Plants as US Chip Factory Race Heats Up

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By Reuters | Updated: 25 September 2021 

Intel on Friday broke ground on two new factories in Arizona as part of its turnaround plan to become a major manufacturer of chips for outside customers.

The $20 billion plants — dubbed Fab 52 and Fab 62 — will bring the total number of Intel factories at its campus in Chandler, Arizona, to six. They will house Intel’s most advanced chipmaking technology and play a central role in the Santa Clara, California-based company’s effort to regain its lead in making the smallest, fastest chips by 2025, after having fallen behind rival Taiwan Semiconductor Manufacturing.

The new Arizona plants will also be the first Intel has built from the ground up with space reserved for outside customers. Intel has long made its own chips, but its turnaround plan calls for taking on work for outsiders such as Qualcomm, Amazon.com’s cloud unit, as well as deepening its manufacturing relationship with the US military.

“We want to have more resilience to the supply chain,” Intel Chief Executive Pat Gelsinger, who earlier in the week attended a White House meeting on the global chip shortage, told Reuters in an interview. “As the only company on US soil that can do the most advanced lithography processes in the world, we are going to step up in a big way.”

Gelsinger said it was too early to say how much of the new plants’ capacity would be reserved for outside customers. He said the plants would produce “thousands” of wafers per week.

Wafers are the silicon discs on which chips are made, and each can hold hundreds or even thousands of chips.

Intel rival TSMC has also purchased land to build its first US campus in Phoenix, not far from Intel’s location, where TSMC plans up to six chip factories , Reuters previously reported.

Gelsinger said Intel plans to announce another US campus site before the end of the year that will eventually hold eight chip factories.

© Thomson Reuters 2021

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Intel to Invest Up to EUR 80 Billion in Boosting EU Chip Capacity: CEO Pat Gelsinger

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By Reuters | Updated: 8 September 2021

Intel said it could invest as much as EUR 80 billion (roughly Rs. 6,97,050 crores) over the next decade to boost the European region’s chip capacity and will open up its semiconductor plant in Ireland for automakers.

Intel CEO Pat Gelsinger, speaking at Munich’s IAA auto show, also said the company would announce the locations of two major new European chip fabrication plants by the end of the year.

There is speculation about possible production sites, with Germany and France seen as leading contenders while Poland, where Intel also has a presence, also in the picture.

The CEO said the aim was for a “total project of EUR 80 billion (roughly Rs. 6,97,100 crores) over the next decade that would be a catalyst for the semiconductor industry… a catalyst for the entire technology industry.”

Intel, the biggest maker of processor chips for PCs and data centres, in March said it planned to open up its chip factories for outsiders to use.

Gelsinger told Reuters in April that the company wanted to start producing chips for automakers within six to nine months to help alleviate a shortage that has disrupted vehicle production around the world.

It is unclear whether the latest announcement means Intel will meet that goal.

“Cars are becoming computers with tires. You need us and we need you… The aim is to create a centre of innovation in Europe, for Europe,” Gelsinger said.

The “Intel Foundry Services Accelerator” is aimed at helping automakers learn to make chips using what Intel calls its “Intel 16” chip manufacturing technology and later move to its “Intel 3” and “Intel 18A” technologies.

Those manufacturing processes would be far more advanced than most of the processes currently used in the automotive industry. Intel said that nearly 100 automakers and key suppliers – including BMW AG, Volkswagen AG, Daimler AG, and Bosch – had expressed support for its programmes. An Intel spokesman declined to confirm whether any had committed to becoming customers.

Gelsinger has been quoted saying Intel wants the EU to commit state aid to Intel’s proposed European investment drive.

Intel views automakers as a key strategic priority. Gelsinger said Tuesday that the company believes chips will make up 20 percent of the cost of vehicles by 2030, a five-fold increase from 4 percent of the cost in 2019.

© Thomson Reuters 2021

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Tesla CEO Elon Musk Signals Competition Concerns Over Nvidia-Arm Deal: Report

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By Agencies | Updated: 30 August 2021

Tesla Chief Executive Elon Musk has signaled competition concerns over Nvidia’s planned purchase of British chip designer Arm, the Telegraph reported on Saturday, citing multiple sources.

E-commerce giant Amazon and smartphone maker Samsung have also lodged opposition to the deal with US authorities, the newspaper reported.

Earlier this year, the US Federal Trade Commission opened an in-depth probe into the takeover. The probe findings are expected in the coming weeks, according to the newspaper.

Tesla, Amazon, Samsung, and Nvidia did not immediately respond to a Reuters request for comment.

Nvidia is likely to seek European Union antitrust approval for the $54 billion (roughly Rs. 3,96,910 crores) purchase of Arm early next month, with regulators expected to launch a full-scale investigation after a preliminary review, people familiar with the matter have said.

Last week, Musk said that Tesla was working on improving the much-awaited update to its self-driving software “as fast as possible.”

Musk tweeted that the Full Self-Driving Beta version 9.2 is “actually not great imo [in my opinion], but Autopilot/AI team is rallying to improve as fast as possible.”

“We’re trying to have a single stack for both highway & city streets, but it requires massive NN (neural network) retraining.”

Tesla had recently come under the scrutiny of US safety regulators, who opened an investigation into its driver assistant system because of 11 accidents where its cars crashed into stationary police cars and fire trucks.

The incidents dating back to 2018 included one fatal crash and seven that resulted in injuries to 17 people, according to the National Highway Traffic Safety Administration.

The agency “is committed to ensuring the highest standards of safety on the nation’s roadways,” a spokesperson said, and in order to “better understand the causes of certain Tesla crashes, NHTSA is opening a preliminary evaluation into Tesla Autopilot systems.”

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Dell Rides Strong Demand for Laptops, Desktops, Cloud Services Due to Remote Work to Beat Q2 Revenue Estimates

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By Reuters | Updated: 27 August 2021

Dell beat market estimates for second-quarter revenue on Thursday as the shift to hybrid work kept demand strong for its laptops, desktops and cloud services.

People globally continue to spend on computer devices even after a year of working from home. Figures from International Data showed shipments of PCs rose 13 percent from April to June, but the pace of growth was much slower than last year’s frenzy.

While the industry has faced pressure from components shortage and supply chain woes, revenue at Dell’s client solutions unit – home to its hardware devices – surged 27 percent to a record $14.3 billion (roughly Rs. 1,05,990 crores).

Its cloud-computing unit, VMware, grew 8 percent, thanks to orders from companies looking to cut costs and expand their digital presence.

Total revenue jumped 15 percent to $26.12 billion (roughly Rs. 1,93,600 crores), beating the analysts’ average estimate of $25.53 billion (roughly Rs. 1,89,230 crores), according to Refinitiv data.

The reopening of the economy has redirected some consumer spending away from computers to other sectors. But a recent rise in COVID-19 cases has prompted renewed curbs and could potentially boost the demand for remote-working equipment.

Dell’s net income fell to $880 million (roughly Rs. 6,520 crores), or $1.05 (roughly Rs. 80) per share, in the quarter ended July 30, from $1.01 billion (roughly Rs. 7,490 crores), or $1.37 (roughly Rs. 100) per share, a year earlier.

© Thomson Reuters 2021

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Nvidia Polaris Supercomputer Deal Said to Be Neared by US as It Waits for Delayed Intel Machine

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By Reuters | Updated: 25 August 2021

The US Department of Energy is nearing a deal to purchase a supercomputer made with chips from Nvidia and Advanced Micro Devices as a key lab waits for a larger supercomputer from Intel that has been delayed for months, two people familiar with the matter told Reuters.

The Nvidia and AMD machine, to be called Polaris, will not be a replacement for the Intel-based Aurora machine slated for the Argonne National Lab near Chicago, which was poised to be the nation’s fastest computer when announced in 2019.

Instead, Polaris, which will come online this year, will be a test machine for Argonne to start readying its software for the Intel machine, the people familiar with the matter said.

Argonne spokesperson Ben Schiltz did not immediately respond to a request for comment, nor did AMD spokesperson Aaron Grabein. Nvidia spokesperson Ken Brown declined to comment.

Intel, AMD, and Nvidia are battling for market share for chips used in data centres. The United States’ array of supercomputers do scientific work for healthcare, climate, and other researchers, as well as performing virtual testing of the country’s nuclear weapons.

Key technologies pioneered in the systems often filter down to commercial data centres in subsequent years, giving an advantage to chip companies which win the contract work.

When Aurora was first announced, Intel and Argonne said the machine would be delivered in 2021, but Intel still has not delivered the key Ponte Vecchio and Sapphire Rapids chips. Intel said in June that the Sapphire Rapids chips would not be in production until 2022, and on Tuesday Intel spokesperson Will Moss said the company remained committed to delivering the computer in 2022.

The $500 million (roughly Rs. 3,710 crores) contract called for Intel and partners to deliver a computer with so-called exaflop performance, or the ability to perform 1 quintillion – or 1,000,000,000,000,000,000 – calculations per second. Now, the first exascale computer in the United States will likely be a different machine at a different lab – Oak Ridge National Lab in Tennessee – built by Hewlett Packard with chips from AMD expected to be delivered later this year.

The Polaris machine at Argonne will not be as powerful as the Intel machine, the sources said. Based on Nvidia’s A100 chips and AMD’s Rome and Milan chips, the Polaris computer will be able to make some exaflop calculations but mostly work at slower speeds.

© Thomson Reuters 2021

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Nvidia-ARM $40 Billion Deal Could Damage Competition, Needs Lengthy Investigation: UK Regulator

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By Reuters | Updated: 21 August 2021

Nvidia planned $40 billion acquisition of British chip designer ARM hit a major hurdle on Friday after a UK regulator found it could damage competition and weaken rivals, and required a further lengthy investigation.

Struck in September last year, the deal for Britain’s most important technology company by the world’s biggest maker of graphics and AI chips sparked a swift backlash from politicians, rivals and customers.

In Britain, it has also become politically charged, with critics arguing that a rise in economic nationalism and greater awareness of the need to own key infrastructure means ARM, owned by Japan’s SoftBank since 2016, should not be sold again.

On Friday, Britain’s competition regulator added to the pressure, saying the merged entity could reduce competition in markets around the world and in sectors as large as data centres, the internet-of-things, automotives and gaming.

To pass a deal with serious competition implications, the regulator would normally require disposal of the part of the merged business that has the power to harm rivals. But the concerns around ARM and Nvidia span the whole business.

The deal also raised alarm because it poses a threat to innovation in industries that form the backbone of modern economies.

“We’re concerned that Nvidia controlling ARM could create real problems for Nvidia’s rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets,” said Andrea Coscelli, head of Competition and Markets Authority.

Powerful Combination

ARM is a major player in global semiconductors, a sector fundamental to technologies from artificial intelligence and quantum computing to 5G telecoms networks. Its designs power nearly every smartphone and millions of other devices.

Semiconductors also underpin critical infrastructure in Britain and the government has said they are in technology related to defense and national security matters.

The deal also sparked anger in the semiconductor industry, where Arm has long been a neutral player licensing key intellectual property to customers who are otherwise intense rivals, including Qualcomm, Samsung Electronics, and Apple.

The fear among chip firms is that Nvidia will give itself early access to Arm’s innovations rather than distributing them to the entire industry on an equal basis.

While Nvidia had offered remedies to lessen the impact, the UK regulator did not believe they would alleviate its concerns.

Nvidia, which had hoped to wrap up the deal by March next year, said on Wednesday it was taking longer to win the necessary approvals than expected and some US based analysts have said they believe the takeover will be blocked. The deadline for the deal is September next year.

Nvidia said on Friday it believed the deal remained beneficial to the industry and ARM’s CEO has said the proposed merger would better support the creation of jobs and enable it to invest in the technologies of the future, as opposed to it becoming a standalone public company.

The sale of ARM last year came as SoftBank sold a string of other assets to reduce its debt.

The UK government will now consider the findings and give a fuller response at a later date, which will also include its thinking on any impact on national security. A full in-depth inquiry takes around six months.

Britain’s government could then block the takeover, approve it or allow it to pass with certain undertakings.

Britain has seen a record number of takeover bids this year, with private equity and listed firms pouncing on everything from supermarkets to pharmaceutical groups and even the maker of its torpedoes and submarine sensors.

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Intel Fails to Overturn $2.18-Billion Patent Verdict, Plans Appeal

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By Reuters | Updated: 11 August 2021

A US judge has rejected Intel’s request to set aside a jury verdict ordering the chipmaker to pay VLSI Technology LLC $2.18 billion (roughly Rs. 16,225 crores) for patent infringement.

US District Judge Alan Albright in Waco, Texas, denied Intel’s motion for a new trial in a sealed order issued late Monday.

Jurors on March 2 had awarded VLSI $1.5 billion (roughly Rs. 11,170 crores) and $675 million (roughly Rs. 5,020 crores) for Intel’s respective infringement of two patents that were once owned by Dutch chipmaker NXP Semiconductors NV.

Intel said in a statement on Tuesday it was disappointed with the decision and intended to appeal. It also called for reforms to prevent “litigation investors” from using low-quality patents to extract “exorbitant” damages, saying the practice stifles innovation and hurts the economy.

In seeking a new trial, Intel said the verdict was tainted by erroneous jury instructions and evidentiary rulings, and appeared to be based on earlier Intel settlements that VLSI’s own damages expert admitted were not comparable.

Santa Clara, California-based Intel noted that the verdict was the second largest by a jury in a patent case, and that the three other largest verdicts had been vacated.

A different Waco jury ruled in Intel’s favour on April 21 in a separate patent infringement lawsuit in which VLSI had sought $3.1 billion (roughly Rs. 23,070 crores).

© Thomson Reuters 2021

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