On August 19, AMD announced its acquisition of ZT Systems, a cloud computing and AI data center equipment designer, for a total value of USD 4.9 billion. This move is intended to strengthen AMD’s AI computing capabilities, while hinting at its challenge to NVIDIA’s dominance in the AI market.

AMD plans to complete the acquisition in the first half of next year. Industry sources cited in a report from Economic Daily News interpret this move as AMD’s strategy to expand its AI chip market reach, extending its influence from chip design to system integration in the AI sector.

AMD CEO Lisa Su stated in an interview that ZT Systems generates over USD 10 billion in annual revenue, nearly half of AMD’s reported USD 22.7 billion revenue last year.

However, AMD plans to sell off ZT Systems’ manufacturing business after the acquisition is completed, while retaining its system design business. Per a report from Reuters, Su further explained that this decision is because AMD has no plans to compete with companies like Super Micro Computer.

“Our acquisition of ZT Systems is the next major step in our long-term AI strategy to deliver leadership training and inferencing solutions that can be rapidly deployed at scale across cloud and enterprise customers,” said Lisa Su.

AMD will be able to offer a broader range of chips, software, and system designs to large data center clients like Microsoft and Meta after acquiring ZT Systems.

AMD also noted that once the acquisition is finalized, ZT Systems CEO Frank Zhang will remain in his position. In the statement, Frank Zhang expressed that joining AMD will help ZT Systems play a larger role in designing AI infrastructure that defines the future of computing.

Regarding concerns about the potential impact of AMD’s acquisition of ZT Systems on NVIDIA chip supplies, one of ZT Systems’ major shareholders Inventec reassured that existing orders for H100, H200, and GB200 chips will remain unaffected. Current collaboration projects will continue as planned, and the customer base will not change.

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(Photo credit: AMD)

After the disappointing financial performance in Q2, Intel has been plagued by a series of challenges. Its shares plunged, falling to the lowest point in over a decade, coupling with the suspension of dividend payouts, layoffs, and product failures. The company may be facing its worst moment in 50 years, and now, the market seems to lose patience with the once-dominant semiconductor giant.

Even Pat Gelsinger, who took over as CEO in 2021 with his technical expertise, has yet been able to rescue this struggling mammoth.

Over the past 50 years, Intel has witnessed eight CEOs, as each of them has left indelible marks in history. Some of their decisions have made Intel so sluggish that it is difficult to turn around.

The latest report by Technews looks back at Intel’s past and summarizes its former CEOs’ impact, examining how the tech giant’s development trajectory is closely intertwined with that of semiconductors.

What happened before Intel’s Foundation?

Let’s go back to 1956, when William Shockley, known as the ‘Father of the Transistor,’ left Bell Labs to establish the Shockley Semiconductor Laboratory.

However, Shockley’s authoritarian management style, as well as his erratic behavior, led to the dissatisfaction of employees. Eight employees, called by Shockley as the “Traitorous Eight,” resigned in 1957 to found Fairchild Semiconductor.

Fairchild, though developed rapidly, faced organizational management issues as well. In July 1968, two of its founders, Robert Noyce and Gordon Moore, resigned to found Integrated Electronics, later known as Intel, on July 18th of the same year. Andy Grove joined as the third employee afterwards.

They are regarded as Intel’s founders who formed a management triad. Noyce was in charge of research and development. Moore, on the other hand, was in charge of business execution, while Grove responsible for commercialization and management. The Big Three had led Intel through its first 30 years, establishing the glorious era from 1968 to 1998.

(Left to right:  Gordon Moore, Robert Noyce and Andy Grove)

First CEO: Robert Noyce (1968–1975)

During Noyce’s reign, Intel introduced the first microprocessor in 1971, which marked the beginning of the personal computer (PC) era and the start of Silicon Valley’s golden age. The breakthrough has earned Noyce the nickname of “Mayor of Silicon Valley” or “Father of Silicon Valley.”

It’s worth noting that Noyce and Texas Instruments engineer Jack Kilby were both pioneers of the integrated circuit (IC). Kilby developed the world’s first integrated circuit at Texas Instruments in 1958, earning him the title of “Father of the IC.” The following year, Noyce conceived the concept of the first planar IC with a metal interconnection method in his notebook, laying the foundation for all modern IC technologies.

Second CEO: Gordon Moore (1975–1987)

The famous “Moore’s Law” was proposed by Moore in 1965. However, the concept was somewhat speculative, as the development of integrated circuit was still in its early stages.

Moore’s prediction was aimed to convey the idea that electronic products would become increasingly affordable, and surprisingly, it came true. Considering the exponential growth in IC complexity, Moore revised his forecast in 1975, stating that the number of transistors on an IC would double approximately every two years. The law has established the foundation for the semiconductor industry. Even how, it is still a hot topic today among semiconductor giants such as TSMC, Intel and NVIDIA.

Third CEO: Andrew Grove (1987–1998)

To follow his superior Moore, Grove left Fairchild to become Intel’s third employee, and took up the management duties after Noyce and Moore.

In the 1970s, Intel’s main products were DRAM and SRAM. As Japanese companies began to flood the global market with DRAM, the profit of the product line quickly declined. Therefore, Grove decided to discontinue DRAM-related products and focus on integrated circuit applications instead.

The decision helped Intel to seize the vast opportunities of the PC era.

Additionally, one of the critical decisions during his tenure was to manufacture its 386 processor independently, which successfully showcased Intel’s capability to manufacture its own processors, establishing its undisputed leading position in the early 1990s.

When Intel was founded, its annual revenue was only USD 2,672. By 1997, thirty years later, its annual revenue had grown to USD 20.8 billion. Grove played a crucial role in the success and was named by Time magazine as Person of the Year in 1997. He also documented his management philosophy in his book, with the famously saying, “Only the Paranoid Survive.”

Fourth CEO: Craig Barrett (1998–2005)

Craig Barrett was an associate professor of Materials Science and Engineering at Stanford University before joining Intel. Upon taking office, his primary challenge was determining whether Intel could become a company that could handle “low margins.”

At that time, the market believed the high-profit era of the semiconductor industry was over, and that the future of PCs would be dominated by low-cost models. Therefore, he led Intel through two major transformations.

The first transformation was the segmentation of Intel’s processor products. Due to the company’s rapid transformation, the competitors are difficult to follow, making them unable to disrupt Intel’s position in the low-cost market. The second, on the other hand, was the expansion from computer/ computing into network servers.

Barrett also believed that Intel’s competitiveness lied in manufacturing and R&D, so he invested USD 28 billion in building advanced facilities and developing new technologies, which secured Intel’s leadership in manufacturing technology.

Fifth CEO: Paul Otellini (2005–2013)

Under Otellini’s leadership, Intel underwent another significant shift. As the first CEO in Intel’s history without an engineering background, Otellini only held an MBA degree.

During his tenure, Intel’s financial performance was excellent, but the company’s focus had been moved from technology to performance-oriented, which prioritized sales and marketing over technological advancements. This shift set the tone for Intel’s later decline.

In 2005, Intel secured an order from Apple, which would adopt Intel’s chips in Macs. However, when Apple inquired if Intel would supply processors for iPhones, Otellini declined the request as he believed the deal was not cost-effective. This decision caused Intel to miss out on the booming mobile device market following iPhone’s 2007 launch.

Rather than focusing selling chips individually, Otellini believed Intel’s platform had greater value, which helped Intel secure its share in the x86 market. However, the company’s technological advantage began to wane. Moreover, due to the global economic downturn, Intel closed five factories, including its last plant in Silicon Valley.

Sixth CEO: Brian Krzanich (2013–2018)

With the decline in the PC market, the new CEO Brian Krzanich, responsible for technology and administration, faced the critical task of transformation once again. In his tenure, Intel shifted its focus towards the Internet of Things (IoT) and cloud computing.

However, as Krzanich did not believe in the economic scalability of EUV, he opted to forgo ASML’s first-generation EUV equipment. As a result, Intel’s 10nm progress faced multiple delays, causing it to fall behind competitors like TSMC and Samsung in advanced nodes, and even led to a loss of market share to rival AMD.

Seventh CEO: Robert (Bob) Swan (2019–2021)

Intel was plagued with many issues, such as the problems with the 10nm process, which were difficult to overcome. During Swan’s tenure, Intel’s dominance in the market has gradually declined. In some sectors, AMD even caught up and overtook Intel’s throne.

At the same time, instead of using Intel’s chips, Apple introduced its self-designed M1 processors, which might become the final straw to Intel’s dominance.

Additionally, Intel had discussions with OpenAI about investment opportunities in 2017–2018, but Bob Swan believed that generative AI models would be challenging to commercialize in the short term and considered the deal to be unprofitable, thus giving up the opportunity to participate in the AI boom.

Eighth CEO: Pat Gelsinger (2021–)

As the three former CEOs all came from operations or finance backgrounds, Pat Gelsinger, with his technical background, was expected to bring a fresh outlook to Intel.

Given the challenge ahead, he planned to significantly expand Intel’s factories and announced the “Four Nodes in Five Years” plan, aiming to advance five nodes within four years, betting Intel’s future on the 18A process.

However, before the 18A technology was introduced, Intel has already been plagued by layoffs, suspension of dividends, and a stock price nearing tangible book value. Whether Gelsinger is the savior to lead Intel out of the woods remains to be seen. Only time will tell.

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(Photo credit: Intel)

As AI giant NVIDIA is said to delay its upcoming Blackwell series chips for months, which are now expected to hit the market around early 2025, the related semiconductor supply chain is experiencing a reshuffle. According to a report by the Korea Economic Daily, Samsung Electronics, which is eager to expand its market share for HBM3 and HBM3e, is likely to emerge as a major beneficiary in addition to AMD.

In March, NVIDIA introduced the Blackwell series, claiming it could enable customers to build and operate real-time generative AI on trillion-parameter large language models at up to 25 times less cost and energy consumption compared to its predecessor.

However, according to The Information, last week, NVIDIA informed major customers, including Google and Microsoft, that the shipments of its Blackwell AI accelerator would be delayed by at least three months due to design flaws.

Blackwell Delayed Potentially due to Design Flaws and TSMC’s Capacity Constraints

Tech media Overclocking points out that the defect is related to the part connecting the two GPUs, and creates problems for NVIDIA’s dual GPU versions, including the B200 and the GB200.

The delay has prompted tech companies to look for alternatives from NVIDIA’s competitors, such as AMD, according to the Korea Economic Daily. Microsoft and Google have already been working on next-generation products with AMD. For instance, Microsoft has purchased the MI300X, an AI accelerator from the US fabless semiconductor designer, the report says.

Samsung to Benefit thanks to the Collaboration with AMD

Samsung, as its HBM3 received AMD MI300 series certification in 1Q24, and is likely to provide HBM3e chips to AMD afterwards, is expected to benefit. Citing a semiconductor industry source, the Korea Economic Daily notes that as it is very risky for a single company to dominate the AI chip supply chain, the situation will create opportunities for Samsung and AMD.

It is also worth noting that Samsung’s HBM3 has passed NVIDIA’s qualification earlier, and would be used in the AI giant’s H20, which has been developed for the Chinese market in compliance with U.S. export controls.

According to TrendForce’s forecast in mid-July, the shipment share of AI servers equipped with self-developed ASIC chips in 2024 is expected to exceed 25%, while NVIDIA owning the lion’s share of 63.6%. AMD’s market share, on the other hand, is projected to reach 8.1% in 2024.

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(Photo credit: NVIDIA)

According to a report from Commercial Times, TSMC’s advanced processes continue to experience strong demand, with major tech companies such as Apple, Qualcomm, NVIDIA, and AMD nearly fully booking TSMC’s 3nm capacity, while the order visibility extends into 2025.

As per the same report, the supply chain of the foundry giant’s 3nm process is also expected to continue the momentum, benefiting companies like Gudeng Precision Industrial (Gudeng), KINIK Company (KINIK), Solar Applied Materials Technology Corp (Solar Applied Materials), YEEDEX and GreenFiltec.

Industry sources cited by the same report indicate that TSMC’s wafer prices for advanced process are expected to see double-digit percentage increases by 2025. Chairman C.C. Wei recently mentioned that TSMC’s wafer pricing is strategic, as values regarding products may differ. The progress in pricing negotiations with customers is “so far so good,” and TSMC is confident about achieving a balance between price and capacity.

A report from Wccftech also suggested that Apple’s upcoming A18 Pro SoC and NVIDIA’s next-generation “Rubin” architecture will both use the 3nm process. Following the widespread adoption of TSMC’s 3nm process, the 3nm supply chain has attracted significant market attention, with expectations for operational boosts in the coming year.

In the semiconductor industry, per the sources cited by Commercial Times, Gudeng has captured about 70% of the market share for EUV POD. As EUV lithography has become a standard in advanced processes, TSMC has been adopting EUV technology starting from the 7nm process node and increasing its usage in later generations. The number of EUV layers used per wafer has been growing, which bodes well for Gudeng as it continues to benefit from this trend.

In the semiconductor sputtering target materials sector, TSMC has traditionally relied on products from international suppliers. However, with a push towards domestic equipment and consumables, Solar Applied Materials entered TSMC’s advanced 7nm process supply chain last year and has now also become a supplier for the 3nm process. Solar Applied Materials’ revenue from semiconductor targets was 4% last year and is expected to reach 10% this year, with a target of 20% by 2026, according to the report.

YEEDEX specializes in supplying components for the front-end processes, such as precision vaccum chucks for EUV equipment. As the industry moves to 3nm processes, wafer thinness increases, making precision vaccum chucks crucial for improving yield rates.

GreenFiltec specializes in extractable chemical filters and AMC Micro Pollution Control services. Through innovative material research and development for filters, GreenFiltec prevents invisible gas molecules from settling in the air. These filters are key consumables for cost control and yield improvement. In the domestic advanced process market, GreenFiltec has captured over 50% of the market share, and its operations are expected to benefit similarly next year, the report noted.

KINIK produces reclaimed wafers and diamond discs. Its high-spec diamond disc products have gained continuous and expanded adoption from major clients, achieving over 70% market share in the 3nm segment. The sources cited by Commercial Times expect that as major clients’ 3nm production capacity reaches full utilization, KINIK’s performance will significantly improve starting next year.

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(Photo credit: TSMC)