Intel Foundry ‘No. 1’ Client—US Department of Defense—Targeted GAA

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The US Department of Defense (DoD) is Intel Foundry Services (IFS) “No. 1” customer, IFS president Randhir Thakur told EE Times, noting that IFS plans to be part of the Defense Department’s state-of-the-art Heterogeneous Integrated Packaging (SHIP) program. This program will require an in-depth knowledge of gate-all-around (GAA) technology facilitating high transistor density 3D chips.

Intel’s new foundry unit has an initial $250 million contract with the Department of Defense to provide chip design and development. The next step, for a much larger and undisclosed dollar amount, will involve manufacturing if IFS can meet certain national security criteria, Thakur said in an interview on the sidelines of Intel’s latest factory project in Columbus, Ohio.

“They [the DoD] produced a few chips, but boy, they better work and be secure,” Thakur said. If IFS meets the Defense Department’s stringent quality goals, other customers will feel much more at ease, he said.

There are huge advantages for IFS if the company can operate as a foundry, according to Bob O’Donnell, president of TECHnalysis Research: “The whole world recognizes that there is this terrible geographic imbalance in where chips are made. There are very few companies in the world that can produce chips at scale, and Intel is one of them. They have to prove that they can do it. It will take a few years.”

The Defense Department’s business is worth about $3 billion a year, according to Thakur. IFS, established in March 2021, expects to have a home-court advantage against Asian rivals such as Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Foundry.

The Department of Defense needs to reduce its reliance on overseas suppliers that are “in China’s shadow” and exposed to greater geopolitical risks, according to US Deputy Defense Secretary Kathleen Hicks.

“Today, approximately 98 percent of this commercial microelectronics that the Department of Defense is so dependent on is assembled, packaged and tested in Asia,” Hicks said in July at a White House event.

IFS won’t be the only foundry competing for defense business. SkyWater Technology, an American foundry that is a trusted chip supplier to the Department of Defense, this year announced plans for a $1.8 billion factory in Indiana.

IFS, which counts MediaTek, Amazon and Cisco among its biggest commercial customers, reported $800 million in revenue in its first year of operation. That figure is less than the $56.9 billion that top foundry TSMC made in 2021. MediaTek is also one of TSMC’s biggest customers.

of Intel acquisition of Tower Semiconductor this year will add customers and revenue to the IFS portfolio. Tower’s 2021 revenue from factories located in Israel, Europe, the US and Japan was about $1.5 billion.

After the Tower deal closes, IFS will add metauniverse to its key market segments, which include high-performance computing, mobile and automotive chips.

“They have the ability to deliver chips into the AR/VR metaverse,” Thakur told Tower. “They have good display and sensor capabilities.”

An aggressive technology roadmap is available

IFS offers a technology roadmap that promises chip design customers some of the world’s leading process nodes in a few years.

“Intel 16 is essentially between 14nm and 22nm, so it’s a mature node,” Thakur said, using Intel’s nomenclature for process nodes. “But Intel 18A is like 2nm.”

IFS will offer the Intel 18A in the second half of 2024. Intel has provided customers with its 0.9 version of the process design kit (PDK) for the Intel 16, which means the node can now be manufactured, according to Thakur. By the end of this year, the 18A PDK will be in version 0.5 — in the middle of development but beyond the research phase, he said.

With the Tower acquisition, IFS will also provide legacy assemblies ranging from 0.5 µ to 65 nm.

The Department of Defense is interested in using Intel’s most advanced technology when it becomes available in about two years.

“Our commitment is Intel 16, but also Intel 18A, which is universal,” Thakur said. With GAA, Intel will begin making a new generation of high-density 3D chips that are a migration from 2D silicon.

IFS plans to be part of the DoD SHIP program, connecting chiplets together with Intel’s Embedded Multiple Die Interconnect Bridge (EMIB) and Foveros 3D wafer stacking technology.

Despite its US home court advantage, Intel relies on Asia for its chips and IC substrates. To reduce this supply chain vulnerability, IFS plans to relocate some of its packaging operations to its manufacturing facility in Chandler, Arizona.

“We have about six different packaging companies in 18 different factories where we manufacture substrates,” Thakur said. “We own the technology and we develop it, so we know how to build it. In some cases, we will do these things in Arizona.

He did not disclose a time frame for the move to Arizona.

New customer corridors are coming

At this time, IFS uses capacity at various Intel factories and other manufacturing operations for the foundry’s customers.

IFS has created a manufacturing “corridor” for MediaTek, the world’s largest designer of smartphone chips.

“That’s a certain thousand waffles a week in that corridor,” Thakur said. Even if parent company Intel has a surge in orders, none can touch the capacity destined for MediaTek, he added. IFS is creating new capacity corridors for customers, according to Jason Gorse, an IFS spokesman.

Supply chain security

Thakur noted the many supply chain issues foundry customers face internationally, including chips that are counterfeited and illegally repackaged.

Before joining Intel, he worked for memory maker SanDisk, where he was responsible for global technology operations.

“We had to do some of the packaging in China. I once went to Beijing with Eli Harari, the CEO of SanDisk at the time.”

Between meetings, they decided to visit the Great Wall of China.

“I was carrying a camera. We used to make those SD cards for cameras. We said, “We need an SD card,” and we went out on the street, and there was SanDisk, SanDisk, SanDisk. The card said it would give you 256MB, but it only took three photos. We hired a compliance and counterfeiting attorney and it became such a huge problem.

Intel also depends on Asian facilities, including one Thakur mentioned in Malaysia for packaging.

It sure is, but going forward for the defense business, Chandler will be the new place to pack, Thakur said.

Despite the geopolitical competition between China and the US in the semiconductor industry, IFS will pursue customers everywhere. While the U.S. is expected to announce new red lines on chip exports to China, Thakur points out that the nation accounts for about 20 percent of parent company Intel’s business.

“That’s how these things get kind of ugly. We are operating in an environment where this kind of geopolitical uncertainty has increased.”

IFS has to compete in the global foundry business with the big players, Thakur said.

The trick is to serve local markets as supply chains become less globalized and more isolated.

“The customer can be anywhere. Now the question becomes, when are you going to manufacture locally to serve them locally?”

IFS, as a latecomer to the foundry business dominated by TSMC and Samsung, needs to find ways to differentiate itself, Thakur said.

He highlighted Intel’s expertise in architectures including x86, ARM and RISC-V, as well as packaging processes and even a chiplet studio that provides finished parts for chip design customers.