Systems Foundry in the AI Era | The Six Five Summit

Welcome back to the six five Summit 2024. This summit is all about AI surprise, two elements of it. First of all, the continued building out the infrastructure for AI that we need, all the way from the edge to the data center and everything in between.

And also the benefits that consumers and enterprises get out of it. And we're gonna be talking about one of my favorite topics here, which are semiconductors, surprise, and also that we've seen semiconductors just pretty much make all of this AI goodness, uh, move forward. One thing we haven't talked about yet on the summit is you actually have to build these right?

And foundries. I know. Shocker there.

It's a really hard thing to do. One of the companies that is blazing new trails in AI and Foundry is Intel, and I have Craig from Intel to chat all about this. Craig, welcome to the six five.

Hey Beth, thanks for having me. Absolutely. So it's been a huge year for Intel Foundry.

I mean, you had your first customer event in February, you broke ground in Columbus. Uh, can you talk about just any noticeable, uh, big milestones that, um, that you can share, uh, with the crowd, just to get them up to speed? Yeah, sure.

Yeah. So this year, like you said, we've had a lot going on. I think my wife is wonder wondering why I'm never home, but that's partly because of all the stuff we're doing.

So we've had a lot of support. The thing that strikes me the most at least, is we've had a lot of support from the customers, from our ecosystem partners and from the government. We've had a lot of actual really tangible results along each of those dimensions so far.

So we have a customer wins across all of our technology platforms. We have, uh, especially the, the six wins on 18 a and, uh, we have a, we're all on our way to becoming the number two foundry in the world. Um, we had announced at Direct Connect all of our technological progress and our future roadmap.

So of the big five nodes and four years plan that Pat announced a couple years ago, uh, we have three of those done and we're on track deliver the last two 20 A and 18 A. So we get back to process leadership here in 2025. Um, then with the ecosystem, we announced partnerships with cadence, synopsis arm, and we actually had all of their leaders at our direct connect event, which, you know, if you followed Intel for a long time, you'd be really quite shocked that, uh, Renee Haas was standing on stage with, with Steve Greg.

Uh, I had been following Intel for three, five years. Did you ever think see that, right? Uh, actually no.

So, but it's great to see. Yeah, and we had, you know, a great list of, you know, industry speakers. We had, uh, Sam Altman, we had Satya Nadella made a virtual appearance.

Gina Raimondo, my secretary Raimondo, um, yeah. And then a bunch of customers as well. And then I think the final thing is on the government side, you know, we announced the CHIPS Act, uh, funding, which was all very exciting.

It's a total of like, you know, $44 billion, right? Eight and a half direct, and then 11 in loans, and the 25% tax credit on the a hundred billion dollars investment. So we're getting a lot done here in a very short time.

Yeah. 0 strategy, I was like, Hmm, that seems aggressive, right? Let's see, uh, let's see where this goes.

And to your credit, right, you, you've been able to hit, uh, you know, your, you're over halfway, halfway there. Um, what I'd love to do is dive into your approach and your strategy. It's a system foundry approach, which I think you had mentioned was really good for this AI area.

Can you drill down on this system foundry approach and maybe compare it to non-system foundry approaches? Yeah, yeah. One of the things that became pretty obvious from talking with our customers and from observing the trends in the industry is that the way that things have been set up until now has worked very well until now, right?

But with AI coming online, we need a whole entirely different approach. You know, it's still very early in the AI kind of era, if you will, but already it's getting pretty clear that the way things are done today in the industry, the path we're currently on, it's not gonna be sustainable from either a power perspective or from, um, a sustainability and reliability perspective. And so, if you look at, uh, what you have to do to actually get to these leaps and bounds that are required to make AI commercialized successfully, it actually takes optimize everything from the factory all the way up through the software.

You know, the foundry model today is, you know, you, you make something really, really well, um, for chips and maybe a little bit of packaging in there. Um, and that, that has worked great. But if you want to get to the point where you're keeping up with the scaling of ai, we have to do something dramatically different.

And that's why the system foundry pyramid that we, that we use to express this starts with, you know, doing everything well that a foundry is supposed to do, because you can't be a systems foundry unless you're first a foundry, right? And then we layer onto that the advantages that are needed to, to bring AI everywhere sustainably and, and scalab scalably. And so the next level on top of that, um, is actually a resilient and sustainable and secure supply chain.

And then above that we differentiate on by bringing the systems of CHIPS capabilities that Intel has developed over its, you know, 50 year history to bear. And so the combination of those three things really helps you optimize everything from the factory all the way through the software. That's gonna be critical.

If you wanna keep up with, you know, the scaling that have ended up us by ai. That's great. And by the way, stuff like the compute networking and, and cooling, right?

Totally self-explanatory. Get that. What kind of software are, are you talking about here?

So there's, this can be multiple things, right? So there's the, the one API software that everyone talks about this abstraction layer to help things plug in easily, especially on the enterprise customers. But there's even things that are, if you dig a little deeper, that are more differentiated.

You know, we have, so something called the AI nick that SCHA announced, um, in the vision event. So what that is, is an open alternative to InfiniBand that is basically twice as power efficient at the same speed. But if you want to take that and use that, let's say you're a hyperscaler, you need to be able to go and say, okay, how is that gonna perform in my system?

Um, how is it gonna be integrated to my software stack? And we can help with both of those. We have software that'll help you, that'll help the customers simulate it in their own environment, how, what performance benefits still get.

We have also the capability to help the customers, uh, write code and put that code into their software stack. So that's one example. But there's other things too, like, you know, emulation software to look at, uh, how do you accelerate being able to write your code before your chip comes out?

And a whole bunch of other things that will be announcing probably next year at, uh, at direct Events. Yeah. Are you sure You just don't wanna spill it here?

Yeah, I'm just kidding. You know, we're not a breaking news, uh, show or it's more about, uh, thought leadership and strategy here, uh, uh, at the summit. But, but it is cool.

And, and by the way, I also appreciate, and you know, my, uh, it used to be, you know, the wafer in the silicon, uh, was was front and center, and the packaging was kind of an afterthought. Now it's like, you can't do any of this AI goodness without having great wafer fab capabilities. And also the packaging of all this, this, that, this goodness.

So literally packaging is now like a first order, uh, citizen. And, you know, things like, uh, MIB and voros and, you know, the ability to, to package memory and multiple chips, uh, I know you call them, uh, the tiles, but it, it's definitely the industry is changing, huh? Yeah.

We think that, you know, by the 2028 ish timeframe, probably 60 or 70% of the advanced node ships, like less than five nanometer, that ship, that ship will actually go into packages that are either two and a half D or 3D or a combination thereof. Yeah. It's gonna be pretty much everything.

Um, at some point. And Intel, a lot of people don't really realize this, right? But Intel has a lot of capability to do this.

You know, we have three to four X the capacity of TSMC, um, in advanced packaging. And then we do so many different varieties and configurations of these chips and are vertically integrated, so we can influence everything from the substrate all the way up through the cooling, like we talked about. And so we're able to, and we even actually have specialized equipment and so forth for assembling.

So we're able to put these really complicated chips together, um, with really good performance power area, and especially really high yield. Yes. Um, yeah, it just, it's just fun.

I mean, a, it's not just ai, it's, it's just, you know, chip lit revolution, um, different types of developers adding different types of, of ip. It's just, it's, it's fascinating here. So I'm gonna dial out a little bit on this and ask you kind of a 50,000 foot, uh, question.

How does Intel Foundry look at the potential of ai? I mean, sure, it's gonna be big, it's gonna be bigger than anybody even thought it, it, it could be. But how do you look at it through your lens?

Yeah. So I think in terms of a market size perspective, you know, when, when we look at the data for, let's say the most advanced note at any given time, by the 2028 timeframe, we see probably about 80% of all wafer shipped. We'll have, uh, a significant component of that related to ai.

And probably about 30% or 40% of those wafers will be exclusively dedicated to ai. So from a market perspective, it's going to be very large. But the challenge that we see is, you know, it's very early in the game.

We haven't even gone through the hockey stick for AI yet. Exactly. But already we're seeing the amount of computations you have to do to train a model double like every 10 months, right?

The amount of power you use for these things, like next year alone, will be greater than 60% of countries. And so if you put all those systems, that's just for the chip itself, right? Right.

For the server chip. But if you put those into a system, it ends up being like three times the power consumed by the entire United Kingdom. So it's just a staggering amount.

And so if we want to be able to go to that rate where we're improving this and keeping up with the rate, the amount of flops that are needed every year and, and the amount of memory bandwidth that's needed every year, it can't happen just by Moore's law. It has to happen. You can't, you know, Moore's law is gonna, it's great, it's gonna continue to fuel us, but, um, it's not gonna get us a hundred or a thousand x improvements over the next five years.

So we have to, that's why we're doing this whole systems approach. 'cause if you optimize all of those things together, um, you can get there. Yeah.

In fact, uh, I was on your stage this year. It's CES 2024, and I was very clear on, you know, the beginning of a supercycle, um, really kicking off the end of end of this year and going through 25 and 26 in the client side. And we're already seeing the massive investments, uh, on the, on the data center and the build out.

I'm really glad you brought up, uh, a power. I mean, the more that I dig into this, you know, there's literally, um, uh, Western Virginia is the home of many hyperscalers data centers, and they literally don't have any more power on the grid to do anything more. Okay.

That literally says, uh, we put even, you know, big EV stations there or more housing. If we don't do something different, we will not have enough power. And it takes about 10 years to, to get, say five years to get a new power source, uh, online.

And that was part of the, the best and freshest example of, of this power. And, you know, it, it's wild to think the, the impact that you at Intel Foundry can have on this overall power equation, when you look at how many chips, uh, that, that you bring out, and the sophistication with, uh, with leading nodes and your ability to optimize that, you know, you have, you have the ability to, to have a huge impact on, on that power draw, uh, holistically. Yeah, definitely.

And, and more the power is, is a hundred percent true. Right? But I think it's even bigger than that too, in the sense that we also have to not just address the power that comes from running the ships, but the power that's used to create the ships.

So if you look at like, where they're all created today, they're all created in countries that not only is it dangerously centralized or you know, in, in terms of supply chain, but the countries where they're made, they don't have access to renewable electricity. And so as like a planet for our countries, for our, for our economies, for our companies, for the planet, we have to get much better at, at doing this. Yeah.

And I, I know we could rat hole and talk about the decentralization, but it's real. I mean, um, and Intel, at least from my vantage point, is a huge part of, of fractal this investment in, in Foundry. So, um, let's get, let's, let's get down to the tip of the spear here on differentiation, right?

You talked about your strategy, um, but I'd love to talk about differentiation. Where are your points of differentiation, uh, with your competitors? And, you know, I would say on leading edge, right?

You've got two competitors and then on kinda the middle of the stack that you'll be, uh, addressing, uh, yourself over time or through partners. Uh, there's a lot more competitors in there. So how gi gimme the elevator pitch here.

Sure. Yeah. So, so I think there's two ways that I look at it, at least.

One is in terms of how differentiated is each aspect of the traditional foundry offering, and then how is it put together in a way that makes it more differentiated? And so if we start with that system boundary triangle concept, pyramid concept that we have, the bottom of it is that world Class Foundry offering, right? And so you look at the process technologies, I think we showed in our investor day, Intel three is kind of coming up to be competitive 18 A, we get, I think we get back to leadership 14 A, we think we're in leadership position.

That's where we introduce high NA 18 A is where we introduced, uh, with the industry first backside power and, and get all around together. So I think on the technology front, we're getting back to process leadership on packaging. You know, we talked about how much more capacity, the three to four s capacity we have.

We also do so many more different configurations of packaging and are able to do so at the really high yields with really large sizes and really could cost. So I think that level we're differentiated, but where I think things really start to shine is when you move up to the next levels of the triangle, right? If you look at a resilient and sustainable supply chain, who has that no one.

And so yeah, we're gonna be doubling the amount of capacity that's available in the world, outside particular regions. And then we're also doing that very sustainably, right? We have 99% of the power we used last year was from renewable sources already.

Hmm. Um, so that's a differentiator. And then once you go up even further to actually thinking about the systems of CHIPS capabilities, like being able to know how to design something, how to help our customers architect something, how, how does the compute and the memory and the network need to be in balance and mapped well to the software?

Who else can help you, can help you do that. Other companies, the model is more like, okay, here's your PDK. If you follow the rules I put in here, it'll yield.

So I think that's where the differentiation comes in. Sure. We have the differentiation at the process level, at the packaging level, right?

When we start to put everything in together from the factory network up through the systems of CHIPS capabilities, that's where it gets really special. Now, I appreciate you pointing that out and because it's somewhat of a, a newer concept, it's important to be talking about that over and over and over, kinda like we are on this video right now. So that's a, the good part about it is, you know, I have always thought that balancing the supply chain was critical.

In fact, uh, I may or may not have been, uh, an advisor to the previous administration on what became the CHIPS act not violating NEA, any NDAs, DOD, uh, but, uh, uh, it, I was, I was involved, uh, uh, in that, and, and I saw it was crystal clear for me too. And plus, I mean, I spent, uh, a lot of time traipsing around China and Taiwan and, and, and Asia. I'm very, very familiar with the region and, and kind of the, the pluses, uh, and, and the minuses here.

Uh, we, we, by the way, certainly a lot of those geopolitical, uh, elements, um, uh, we saw the government gets us government gets serious about it with, with the CHIPS act. But I wanna ask you about the, about the future here. Uh, what does the future look like?

Uh, how do you define success and, and how should we measure your degree of success over the upcoming years? So I think for us, ultimately the future, we'll be judged by our execution, right? So do we deliver on the technology milestones that we set out?

Do we deliver on the performance, the power and area that we promised our customers we would deliver? And then as a result of that, we're gonna see customers more and more coming on board. You know, boundary is one of those things where essentially, as you know, you're going to a customer and say, Hey, bet your company on us.

You know, right? If, if we are not in this together, and if you can't trust us, then essentially their business will fail. And so we have to continue to earn that trust over time by, by saying what we're gonna do and then actually doing it.

And so we're really focused on that. And so far we think it's going well. We have a pipeline of both business awards, uh, that are about $15 billion.

And we believe we have a path, a solid, credible path to get to, uh, about $15 billion of annual run rate by 2030, which that's from external customers alone. And you combine that with the internal, and I think will be squarely in the number two foundry spot that we, so to be That is so audacious, Craig. Um, and so exciting.

You know, it's funny, uh, it's easy for me being on the pundit side to kind of watch what was going on. But if you've read anything that, that I've talked about, uh, related, uh, to Intel, um, I saw the opportunity there. It was, it was crystal clear, and I think BI was in the industry for over 20 years.

Um, and it was funny. I I was actually Intel's biggest customer, uh, once and okay, I was one of your biggest competitors too. But I got to know, you know, you get to know the industry and you, you see the signs.

And what I'm seeing is very positive, uh, the thought that 18 a uh, could be not only the most cost competitive, but feature and performance competitive, uh, I saw that on your last, uh, direct connect slide is, is, is huge. And then moving into 14 a, um, is, is, is, is, is is pretty wild and not that far off, right? Some people think, oh, you know, I mean, you can crank out a new bank of software like a month, but, you know, to build a foundry, get pro, it takes like four to five years of planning to get something like that going.

So literally, the decisions that you all made years ago, uh, are just coming into, into, into fruition now. Um, and the signs of success, uh, that I'm seeing, I mean, obviously everybody wants to see more. They wanna know who it is, right?

Like, uh, you know, which customer, how much, by the way, ironically, your, your, your competitors don't have to share any of that. Uh, but they want that from you. But I, I see the, I see the signs on the wall.

Um, it was funny, 10 years ago, people were telling me, you know, semiconductors, they're a commodity, right? And, you know, anybody can make them and anybody can do this. And then, and then the pandemic hit and we're like, oh, wow.

Uh, diversified supply chain, um, uh, is super important. Uh, you know, and it wasn't just the bleeding edge tech that mattered, it was always kind of the specialty and the lagging edge, and then generative AI hits and it's like, it, it just, it just amplifies, uh, this and is literally is, is the cur, semiconductors are the currency of building out, uh, AI and all of this stuff that software runs on. So I'm super excited, Craig, you seem super excited, uh, about this.

And I look forward to anything your your next, uh, divulge of, of information. So I I will be listening. Yeah.

I'm so excited about it too. And I think, you know, customers are getting excited about it. The ecosystem's getting excited about it, and government's getting excited about it.

They're all kind of behind us. But, you know, you mentioned what happened during the pandemic, right? And that was for 30 cent chips, right?

Disrupting our whole supply chain. Imagine now that AI's gonna be in everything we do. What happens when all those chips who currently come from one vendor and one foundry are not available?

Right? And so I think people are gonna start curing a lot more about this and Intel as we demonstrate that we are a real foundry that we've been executing. You know, the conversations have been shifting from can you execute to, okay, you know, how can we do this?

Or how's it gonna work? And what are the logistics of it? So the progress is there and it's being recognized by the, by the whole ecosystem.

So we're really happy to see it. Yeah, it's been, uh, it's, it's uh, it's fun to watch 'cause it's so big, it's so bold, it's so audacious and so important. All kinda wrapped up, uh, into one.

So Craig, uh, thanks for coming in here and, uh, speaking at the six five Summit 20 20 24. If I thank you for having us. We're super excited.

Yeah. Excellent. So this is, uh, Craig and Pat.

We are talking about Foundry services and the importance that it brings to the whole AI ecosystem and the whole AI story. Um, I like, I love Chip. Hopefully you can tell it, tell that, uh, stick around for some more semiconductor action here in 2024, we have semiconductor manufacturers.

We're talking memory accelerator chips, CPU u GPUs, everything under the sun. Take care, and thanks for tuning in.