Intel Embraces an Internal Foundry Model

Intel CEO Pat Gelsinger sent the following statement announcing creation of an internal foundry model for external customers and Intel product lines and the creation of the IDM 2.0 Acceleration Office, under the leadership of Stuart Pann, to all company employees on Oct. 11:

When I returned to Intel in 2021, I introduced our IDM 2.0 strategy: a multiyear journey to regain unquestioned technology leadership, manufacturing scale and long-term growth. Today, we begin the next phase of our IDM 2.0 journey.

In the first phase of our transformation, we made significant progress on our process roadmaps and capacity. We remain on track to deliver five process nodes in four years, and we've invested in the capacity required to meet the industry's demand for semiconductors, bringing much-needed balance to the global supply chain.

The next phase of our IDM 2.0 journey requires a fundamental shift in mindset. We must embrace an internal foundry model, not only for our external customer commitments but also for our Intel product lines. This is a significant evolution in how we think and operate as a company, but the systems and infrastructure that served us well in the IDM 1.0 world will not enable us to achieve the full potential of IDM 2.0.

Internal Foundry Model Explained

Implementing an internal foundry model means establishing consistent processes, systems and guardrails between our business unit, design and manufacturing teams. This will allow us to identify and address structural inefficiencies that exist in our current model by driving accountability and costs back to decision-makers in real time. It will also put Intel's product groups on a similar footing as external Intel Foundry Services customers and vice versa.

For example, our business unit and design teams will be able to consider the potential impact on their margins if they want to run an additional product stepping, while the manufacturing team will be able to assess requests based on actual costs and impact on factory output. This will give teams the tools and transparency they need to find the most effective and cost-efficient solutions before implementation in silicon, ultimately helping us maximize factory output, reduce costs and shorten design cycles.

We will also create a foundry accounting model that encompasses manufacturing, technology development and Intel Foundry Services. This will give us more transparency into our financial execution and will allow us to fully benchmark and drive ourselves to best-in-class foundry performance.

IDM 2.0 Acceleration Office (IAO)

To facilitate this effort, I have established an IDM 2.0 Acceleration Office, which will be led by Stuart Pann, Senior Vice President of our Corporate Planning Group (CPG). In addition to his responsibility leading CPG, Stu will take on the role of Chief Business Transformation Officer, reporting to Chief Financial Officer Dave Zinsner and joining the executive leadership team. The IDM 2.0 Acceleration Office will work in close collaboration with all business units and functional teams to bring this new internal foundry model to life.

Execution Excellence

Alongside initiatives like the next evolution of our tick-tock model and our Gladius program for driving excellence in product development, embracing an internal foundry model will enable us to deliver the competitive cost structure and predictable cadence of leadership products essential to our success.

We will continue to provide regular updates on these initiatives and our progress in restoring our culture of execution excellence.

This is our time to take action as One Intel to unleash IDM 2.0's full potential. Thank you in advance for your hard work and commitment to our strategy.