Intel announced today an expansion of its packaging and testing facility in Chengdu, China. In addition to packaging and testing for client products, the facility will now offer services for server chips and will establish a Customer Solutions Center aimed at boosting local supply chain efficiency, enhancing support for Chinese clients, and improving response times. Planning and construction for these enhancements are already underway.

Under Intel’s expansion plan for the Chengdu base, the added capacity will primarily focus on packaging and testing services for server chips to meet Chinese clients’ demands for high-efficiency, customized packaging solutions.

The soon-to-be-launched Intel Customer Solutions Center is designed as a one-stop platform to support enterprise digital transformation, offering industry clients tailored solutions based on Intel’s architecture and products.

The Santa Clara, California-based company is set to invest $300 million into its local entity, Intel Products (Chengdu), to support its expansion efforts, according to a WeChat post from the city’s Reform and Development Commission, as reported by the South China Morning Post.

According to Intel’s public information, the Chengdu packaging and testing base is one of the company’s largest globally. ESM China reports that the facility has become one of Intel’s three major wafer preprocessing sites worldwide, supplying half of Intel’s mobile device microprocessors.

Located in Chengdu’s High-Tech Comprehensive Bonded Zone, Intel’s packaging and testing facility began its journey in August 2003 when the company announced plans to build a semiconductor packaging and testing factory in the city’s High-Tech West Zone. Construction of the first phase started in February 2004, and by late 2005, the facility was operational, with products exported worldwide. The second phase broke ground in August 2005, and by October 2006, construction was completed, including the training center, while the microprocessor facility began production in 2007, packaging Intel’s most advanced multi-core microprocessors.

(Photo credit: Intel)

According to a report from Silicon Angle, four former Intel directors have published an article in Fortune, urging the company to spin off its fab business.

The authors include Reed Hundt, a onetime Federal Commission Communications chair, Charlene Barshefsky, former U.S. Trade Representative, James Plummer, Stanford University’s dean of engineering for over a decade, and David Yoffie, a Harvard Business School professor and longtime Intel director.

Their argument basically are based on two reasons. First, they argue that if Intel is going to be acquired by other companies, the potential buyers would likely prioritize cost-cutting and see little value in the money-losing manufacturing fab. They highlight this possibility due to Intel’s recent significant drop in stock price, and with its fab business operating at a substantial loss, it could become a target for cost-cutting initiatives.

Secondly, according to their article in Fortune, they noted that since Intel operates its own foundry within its corporate structure, it struggles to attract business, as other chip design companies see it as a potential competitor.

In their article in Fortune, they pointed out that Nvidia, Qualcomm, Broadcom, and others are all looking for a second manufacturing option other than TSMC, but will continue to be cautious about Intel as long as it remains a direct competitor. They indicate that spinning off the fab business would alleviate these concerns.

They argue that while the U.S. government has already promised up to USD 8.5 billion in grants and USD 11.5 billion in low-cost loans for Intel, the government should further demand Intel to split its design and manufacturing operations into two completely independent companies.

On the other hand, Intel’s former CEO Craig Barrett has a different perspective on whether Intel should split its foundry business. In an article published in Fortune, Barrett argues that separating Intel into two distinct companies is not the answer. He pointed out that this approach would hinder the foundry business’s ability to keep pace with the latest technology, leaving the U.S. government dependent on foreign suppliers like TSMC for cutting-edge advancements.

Previously on September 16th, Intel announced that it will transform its foundry business into a wholly-owned subsidiary with its own board of directors. According to its press release, this new structure will provide greater separation and independence for Intel’s external foundry customers and suppliers from Intel’s other divisions. Importantly, it also gives the company the flexibility to evaluate independent funding sources in the future and optimize the capital structure of each business to maximize growth and create shareholder value.

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(Photo credit: Intel)

Under the pressure to speed up AI development, the White House, on October 24^th, announced the nation’s first-ever strategy for leveraging the power of AI while managing its risks to enhance national security, according to a report by the Washington Post, citing the remarks by national security adviser Jake Sullivan.

The memorandum, in which the roles of China and Taiwan have been highlighted, is instructing the Pentagon and intelligence agencies to boost their use of artificial intelligence, while prohibiting agencies from utilizing the technology in ways that “do not align with democratic values, the report noted.

Sullivan also emphasized that the country needs to accelerate the deployment of AI within the national security framework faster than its rivals, according to another report by Reuters. He stated that if the U.S. fails to implement AI more swiftly and thoroughly to enhance its national security, the nation risks wasting the advantage it has worked so hard to achieve.

It is worth noting that in the memo, the government is instructed to assist U.S. companies in safeguarding their AI technologies from foreign espionage and to continue efforts to diversify the supply chain for high-end computer chips essential for advanced AI initiatives, the majority of which are manufactured in Taiwan, the report suggests.

To hinder advancements in supercomputing and AI that could support the Chinese military, the U.S. implemented export controls on advanced chips and chip making equipment for China in 2022 and 2023, limiting shipments from companies such as AI accelerator giant NVIDIA.

The latest announcement, according to the Washington Post, following an executive order on AI signed by President Joe Biden in October 2023, reinforces the administration’s initiatives to counter technological competition from China and other adversaries.

In addition, this memo reportedly reflects the administration’s ongoing efforts to address concerns regarding the potential risks of AI while simultaneously promoting its use within the government and fostering continued innovation among Big Techs in the U.S.

According to the report, the military has historically been an early adopter of various AI applications, such as image-recognition algorithms that analyze satellite images to identify potential targets and autonomous cruise missiles that navigate complex terrains.

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TSMC has halted shipments to Chinese chip designer Sophgo after a chip it manufactured was reportedly found in a Huawei AI processor, according to Reuters, which cited two sources familiar with the situation.

The Reuters report noted that Sophgo had ordered chips from TSMC identical to the one detected in Huawei’s Ascend 910B processor. Huawei, restricted from acquiring certain technology to protect U.S. national security, is under stringent export controls. However, Reuters reported that it remains unclear how the chip ended up in Huawei’s product.

On Sunday, Sophgo posted a statement on its website asserting it has never engaged in any direct or indirect business relationship with Huawei and conducts its operations in strict compliance with all applicable laws, including U.S. export control regulations. The company affirmed it has never breached any of these laws or regulations.

Sophgo, which is affiliated with cryptocurrency mining equipment maker Bitmain, also noted it had submitted a detailed investigation report to TSMC to confirm its non-involvement with Huawei.

TSMC declined to comment, according to Reuters, while Huawei has not yet responded to requests for comment. The U.S. Department of Commerce acknowledged awareness of potential export control violations but declined to comment on any active investigations.

(Photo credit: Sophgo)

Rapidus is building a factory in Chitose City, Hokkaido, aiming to mass-produce 2 nm wafers in 2027. According to a report from MoneyDJ, Japan’s Minister of Economy, Trade and Industry visited Rapidus’s factory under construction on October 24th, considering to offer additional assistance to Rapidus.

The president of Rapidus claimed that if the mass production of 2 nm goes smoothly, the second factory plans to mass produce 1.4 nm, according to the report from MoneyDJ.

The report from MoneyDJ, citing sources from Kyodo News, stated that Japanese Minister of Economy, Trade and Industry Muto Yoji, following the visit, announced at a press conference that the government is considering providing additional support to Rapidus. This includes exploring private sector investments and loans, as well as the possibility of submitting a bill to Congress for loans and funding for Rapidus.

According to Kyodo News, Rapidus President Atsuyoshi Koike stated that construction is progressing smoothly and is 80% complete. He also emphasized that if mass production of the 2 nm process goes well, they plan to build another plant aimed at producing 1.4 nm chips.

Regarding clients for the 2 nm process, Rapidus President Atsuyoshi Koike mentioned in a press conference on October 3rd that, in addition to the already disclosed companies, they are negotiating with 40 others, with potential announcements expected next year.

According to a report from Nippon news, on October 18th, Toyota Motor Corp. and Denso Corp. are considering making additional investments in Rapidus. The news pointed out that Rapidus has been asking shareholders and others for investments reaching 100 billion yen.

According to the report from MoneyDJ, Rapidus aims to mass-produce 2-nm chips in 2027. This mass production plan is estimated to require approximately 5 trillion yen. Currently, the Japanese government has decided to assist Rapidus with 920 billion yen, but there is still a funding gap about 4 trillion yen.

According to a report from Nikkei, the Japanese government has considered to transferring government-subsidized plants and equipment to Rapidus in exchange for company shares.

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(Photo credit: Rapidus)