Intel IFS – NVIDIA Tie-up?

By Patrick Moorhead - February 13, 2024

The Six Five team discusses Intel IFS – NVIDIA Tie-up?

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Transcript:

Daniel Newman: So I think I shared, Pat, and this was the third or fourth time that I basically saw the deal is inked or the ink hasn’t dried or there’s a deal to be made or that basically Intel is going to be doing a whole lot of foundry work for NVIDIA. Pat, I won’t take any oxygen on this one. I’m going to let you go straight into it.

Patrick Moorhead: So I wouldn’t be surprised at all, and I put a 95% chance of this happening, and it’s not what TSMC might not be doing with COAS, which is their packaging technology for these multi-tile and anything that has to do with HBM. It’s just that they don’t have the capacity. NVIDIA is already a RAMP-C partner with Intel. So if you need to get, the defense department will buy something, it has to be part of the RAMP-C program and it can’t be coming from TSMC. So I think there is a 95% chance that this is going to be the case and hats off to the IFS folks and NVIDIA for hopefully increasing the amount of output that it can get.

Daniel Newman: Listen, Pat, I don’t think we need to spend a whole lot of time. We don’t like to spend a ton on rumors. We prefer to deal in facts, but as analysts, some of our work is to try to prognosticate and understand what’s happening and what’s going to happen in the future. I think sometimes when you see and you hear something enough, you just need to get some feedback of, “Is this real?” Well, this could be real volume. Basically, from a packaging standpoint, the rumor was could be 300,000 H100 GPUs per month. So I wrote up in a MarketWatch piece with the bull case for Intel.

Look, it’s funny how, like I said, everybody always wants things to be … It’s like an exclusivity thing. If I say Intel is doing okay, it means I’m saying everyone else is going to do badly, and it’s not that. It’s that in the world of AI, in the world of compute, all tech companies are going to grow. The market’s going to grow, cloud is going to grow. You see cloud accelerating. AWS grew 14%. Microsoft grew 30%. Google grew 26. They all calculated slightly differently. The point is is cloud is accelerating. Well, cloud’s accelerating because AI is accelerating. AI is accelerating means there’s going to be more chip manufacturing. AIPC is more chip manufacturing. Automotive, more chip manufacturing.

Intel’s IFS is a big headline in my bull case. The point is we’ve got geopolitical issues with the East. You’ve got TSMC having a lot of trouble getting people here to the US, and then what they’re building is not at the very leading edge here either in the United States. So Intel has the chance with what it’s doing. I heard that even today that the chipsack and the money is supposed to come as soon as next four to eight weeks was the rumor today. Again, we’ll see, but that we need this here. We need this here. The US needs to be manufacturing, needs to be doing packaging, needs to be part of the foundry ecosystem and needs to be helping to deliver at the leading edge.

This is good news. We want strong Intel. Of course, we want competition. Of course, we want to see Arm and AMD and all the others succeed, but Intel being strong, especially in the foundry, is good for the world, good for the technology ecosystem.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.