Chess Anyone?

For those accustomed to calculated moves, this week must have been a thriller. Iconic in its own right, despite changing fortunes, Intel made a loaded announcement.

To unpack:

1) CEO, Pat Gelsinger has noted an uptick in Customer demand since July release of PDK followed by an AI-collaborative announcement with AWS. ??

2) The speed of manufacturing build out is now synchronized to the tempo of the trickle as funds are released. ??

3) Amidst the hype, the release of the 18A AI Chip is tangible progress. ??

4) Recent events are symbolic for the foundry journey, as the nation catches up with competitive technology. ??

5) Digital technologies (smart software, digital twin, AI) build efficiency and optimization into the broad sweep of manufacturing from Design to Production as Intel glimpses the end of the tunnel with 18A. ??

6) Intel is shifting its regional focus on capital investments to Oregon, New Mexico and Ohio, with a pregnant pause of German and Malaysian initiatives. ??

7) Intel's focus is on competitive onshore, capital projects that are profitable and with purpose. ??

8) The premier customer to catalyze this shift, is AWS. With the AWS-partnership, Intel will capture the data center demand that resides amidst hyper-scalers. ??

9) Surely, this time around, Intel leadership seems to have checked all the boxes, including some symbolic and synergistic leadership changes? Cost measures (recent layoffs, likely spin-offs), and its balance sheet, all demonstrate financial wherewithal to finish what they started. ??

10) With today's proof points Intel is reverting to a reinvented roadmap. ?

But wait! Did we hear about a split of product design and manufacturing? It would seem foundry services is being stood up as a subsidiary to facilitate external funding for a quasi-private fab. As a concept, the idea of "my foundry" is compelling, if viable.

Seemingly, commercial concerns and competitive paranoia about data privacy will be addressed through this model. Hooks have been stitched into this solution to solve for investment - external investment.

While Department of Defense demand can be confidentially and securely addressed through the recently disclosed "secure enclave" concept. The real calculated risk in the subsidiary venture is that the capital investment in foundry opportunities will separate from Products. "Distinct but better together" exhaled Intel CEO Pat Gelsinger.

It would seem that Intel is well on the way to deliver against a calculated plan that is less defensive, more confident. These changes in manufacturing footprint should restore shareholder confidence. But, the proof is in a certain something that is digestible - a product, not a production process. Or, it's back to moving knights and bishops.