Intel Bets Its Newest Chip Will Power a Comeback

Whoever’s naming chips at Intel is having a lot of fun: “Panther Lake” is the tech company’s latest and most advanced semiconductor, shown off yesterday for the first time. Intel will make the chips at its Arizona factory, which it said is now fully up and running. 

Intel has invested more than $20 billion in the new factory, which will churn out the company’s chips in the US for the first time in nearly a decade. The foundry uses lithography machines made by ASML that cost $250 million each to perform the complicated processes needed to make the semiconductors (the RV-sized machines draw designs on nanometers-wide silicon wafers).

Intel’s CTO has called Panther Lake “foundational to our future.” And it’s not just the success of Intel hanging in the balance, but also the success of US chip manufacturing.

The Chips Are Down But Not Out

Intel’s stock was worth nearly half a trillion dollars in 2000 as everyone bought Dell PCs with Intel chips for their family computer rooms. But then Intel made a series of missteps:

• First, it turned down a chance to supply chips for Apple’s iPhones and missed the mobile phone boom. Competitors including Arm Holdings and TSMC took up Intel’s slack. 
• Then Intel missed the AI wave, failing to make a chip that could rival Nvidia’s. Nvidia rapidly grew from a small gaming-focused manufacturer to the world’s most valuable company. And while Nvidia became the leader in designing chips, TSMC dominated the manufacturing side. Taiwan-based TSMC now makes more than 90% of the world’s semiconductors for companies including Nvidia, Apple and Google. 

This March, Intel appointed a new CEO who is determined to revive the company’s dot-com-era glory days. Intel has been cutting costs with layoffs that’ll amount to 15% of the company, and it’s counting on its newly opened factories to bring in revenue. As Intel poured money into the construction of new plants (remember the $250 million machines?), its foundry biz has lost about $10 billion a year, according to Morgan Stanley analysts. 

Great Expectations: Intel’s under pressure to carve out space for itself in the semiconductor industry as the US government backs its comeback. After President Donald Trump and Intel CEO Lip-Bu Tan had a chat at the White House about bringing chip production back to the US, the US government scooped up a 10% stake in Intel in August. The Trump admin is trying to reduce US dependence on overseas factories as it prioritizes slapping “Made in America” stickers on high-value tech. Restrictions on China’s chips haven’t slowed the industry down much, and top chip-maker TSMC’s Taiwan factories are a little more than 100 miles away from the Middle Kingdom. Panther Lake, no pressure, little guy.