Intel to make processors for other chipmakers based on their own designs

CEO Pat Gelsinger says the company will invest $20 billion (£14.6 billion) on two new 'fabs' in Arizona this year

Intel plans to set up a new, independent division to make processors for other chipmakers based on their own designs.

During the firm's global 'Intel Unleashed: Engineering the Future' webcast on Tuesday, CEO Pat Gelsinger shared his vision for 'IDM 2.0' strategy, announcing that the company would spend tens of billions of dollars on new manufacturing plants.

It will include an estimated $20 billion (£14.6 billion) investment on two new 'fabs' in Arizona, USA, this year. Additional factories will also be built in the US and Europe in the coming years, according to Intel's CEO.

"We are setting a course for a new era of innovation and product leadership at Intel," said Gelsinger.

"IDM 2.0 is an elegant strategy that only Intel can deliver - and it's a winning formula. We will use it to design the best products and manufacture them in the best way possible for every category we compete in," he added.

According to Gelsinger, Intel will build significant extra capacity so that it can make other companies' chips for them.

Gelsinger is not happy with the fact that majority of computer chips are currently manufactured in Asia.

The Taiwan Semiconductor Manufacturing Co. (TSMC) and South Korea's Samsung are the dominant players in the global chip manufacturing industry.

Gelsinger said that in addition to establishing two new fabrication plants in Arizona, the company also plans to expand an existing Irish facility in County Kildare.

The American chipmaking giant has largely focused on making its own chips in the past years but, Gelsinger says, that will change with the company's new and independent Foundry Services unit.

Intel suggested that it had received positive response for its foundry services from companies including IBM, Amazon, Google, Cisco and Qualcomm.

Microsoft CEO Satya Nadella even appeared in a short video, expressing his support for Intel's manufacturing changes.

Intel has repeatedly missed chipmaking targets over recent years. As a result, its newest desktop chips use older transistor technology than rival chips from Apple and AMD.

Intel's new strategy comes at the time when a global chip is causing problems for automakers and others.

Last month, freezing weather forced many chipmakers to close their plants in Texas. An ongoing drought in Taiwan is also threatening production there, although the government said earlier this month that it had enough water reserves to keep local chipmakers running till late May 2021.

On Sunday, Japanese chipmaker Renesas Electronics stated that partial suspension of operations at its Naka plant due to a recent fire could have a "massive impact" on its ability to supply chips to customers, including automakers.

TSMC also said in January that it plans to spend $28 billion on new chipmaking capacity this year to try to meet demand.