Why I’m Not Surprised That IBM And Intel Are Collaborating On Chip Tech

Last month IBM and Intel shared that they would be partnering to advance research in next-generation logic and packaging technologies. You can find the big Intel IDM 2.0 update here. Separately, the two companies have long been at the forefront of research and engineering, spanning the early days of computing to today’s cutting-edge technologies, such as A.I., hybrid cloud, 5G, the intelligent edge and quantum computing. IBM was a pioneer in chip packaging innovations going decades back, debuting the first seven and 5-nanometer test chips, inventing the one-transistor DRAM and more. In its own words, IBM has “cultivated a thriving semiconductor research ecosystem” headquartered in Albany, NY. On the other hand, Intel is the largest semiconductor manufacturer in the world, with all the R&D heft that comes along with that. Bringing two of the biggest names in semiconductor research and development together to propel the industry forward makes all the sense in the world to me—a point that I’d like to elaborate on today.


Leaders in research and development

To further illustrate IBM’s chip research clout, I wanted to provide some other examples of its innovation. It was the first to release an analog neural network training chip, which demonstrated the advantage of leveraging analog in A.I. training. It also boasts the first A.I. accelerator to present cutting-edge innovations in reduced precision computation. The company also claims the first 14nm node embedded spin-torque MRAM—a component that is mind-bogglingly around 8,000 times smaller than the diameter of human hair. As mentioned earlier, IBM was responsible for the world’s first 7nm chip with EUV and high mobility SiGE channel PFET, as well as the first 5nm transistor with Novel NanoSheet transistor architecture. IBM attributes its notable breakthroughs to its over 300 research labs worldwide, which all feed into the Albany ecosystem. All of this to say, IBM is a company with a very long-term focus on research in the packaging and logic space. 

Last month I got the chance to speak with Intel’s new CEO, Pat Gelsinger, to hear about his company’s manufacturing technologies and product roadmaps, part of a strategy the company refers to as IDM 2.0 (Integrated Device Manufacturer). For all of its strengths, Intel missed the ball on its 7nm and 10nm schedules—a point that Gelsinger acknowledges and seems determined to rectify moving forward. I came away from our conversations more confident with Intel’s plans for 7nm, thanks to the company’s increased usage of EUV and its commitment to the revised schedule (as is, Intel is targeting 7nm Meteor Lake for high volume production in 2023). Perhaps the most significant part of IDM 2.0 is a $20B doubling down on manufacturing, to be used on two new fabs for its new Intel Foundry Services (Intel’s back, baby!) and its internal uses. 

How it all comes together

IBM’s hard tech strategy boils down to this—create what’s next in semiconductors and then leverage its ecosystem partners for manufacturing. And who just announced a $2B investment in foundry services? The answer is, of course, Intel. These long-time competitors are now teaming up to advance process and logic technology, an effort many believe to be a move to advance U.S. semiconductor interests by combatting Taiwan-based TSMC. Intel has attempted unsuccessfully to out-muscle TSMC in the past, but with Big Blue involved, its Foundry Services vision could be much more formidable. IBM itself is no stranger to foundries—it successfully orchestrated its foundry service for almost a quarter of a century before selling it off to GlobalFoundries in 2014. Intel’s nascent foundry services should benefit enormously from IBM’s research ecosystem and experience. 

Wrapping up

As IBM’s Mukesh Khare put it during a Q&A on the topic, “It’s great for the semiconductor industry and its great for leadership in the U.S. to make sure that we continue to be the leader in semiconductor innovation.” It’s not often you see two historically competitive titans of the industry come together like this, and I’m very much looking forward to seeing the fruits of the partnership somewhere down the line. 

Note: Moor Insights & Strategy writers and editors may have contributed to this article.