Process Disaster at Intel Head of Hardware Leaves, Department is Reorganized

Intel draws personnel consequences from the repeated delay of the 7-nm process: The Technology Systems Architecture and Client Group is restructured and its boss leaves Intel.

A few days ago, on the occasion of the announcement of the results for the second quarter of 2020, Intel had to admit that the introduction of the 7-nm process would be postponed by another six months. It could now be 2023 before the process is used to manufacture its own CPUs.

The company has now drawn the consequences in terms of personnel. The Technology Systems Architecture and Client Group (TSCG), which was previously headed by Murthy Renduchintala, will be divided into five areas of responsibility, whose respective heads report directly to CEO Bob Swan. Murthy Renduchintala will leave Intel on August 3.

With this move, Intel is also making it clear in terms of personnel that the company is by no means taking the delays in process development lightly. It was said that Intel wants to outsource parts of the chip production to third party manufacturers in order to be able to deliver. According to Intel, the yield on the 7 nm level is one year behind the original plan.

This could improve the chances for competitors in Asia. Immediately after Intel's announcement, TSMC's shares rose by 10 percent. On July 28, TSMC was ranked tenth among the most valuable companies in the world with a valuation of 432 billion dollars.

Both TSMC and Samsung are already working on 5nm processes. TSMC is using them to manufacture, for example, the chips that will be used in the latest generation of 5G iPhones. TSMC has already announced its intention to ramp up the 3nm process technology in the second half of 2022. TSMC is investing $17 billion this year to expand capacity, Intel $15 billion this year, and Samsung plans to invest more than $107 billion in expanding logic ICs by 2030.

Whether Intel will outsource more and more of its chip production will depend on whether a better cost structure can be achieved. Up to now, Intel has attached great importance to pushing ahead with production under its own responsibility, because the company was convinced that this was the only way to remain at the cutting edge of technology. This has proven to be the right decision over decades. But now Intel has fallen behind TSMC and Samsung by at least two years.

According to Taiwan News, Intel has already reached an agreement with TSMC to have 6-nm chips manufactured at the world's largest foundry.

Can Intel catch up with this lead? Or completely abandon the development of new processes over the next 5 to 10 years? Bob Swan had said that a pragmatic decision would simply be made based on which process technologies would provide the best performance for customers, whether it was in-house, foundry or a combination of both.

Intel did not address these issues in the press release on the new structure and the managers who will lead the five departments in the future:

In future, Technology Development will be headed by Dr. Ann Kelleher, who previously managed Intel's entire manufacturing operations. She will now be responsible for the development of 7-nm and 5-nm processes. Dr. Mike Mayberry, who previously headed Technology Development, will act in an advisory capacity during the transition period before retiring as planned at the end of the year after 36 years with Intel, including managing Intel Labs.

The management of Manufacturing and Operation will be taken over by Keyvan Esfarjani, who previously managed the production of the Non-Volatile Memory Solutions Group (NSG). There he defined the strategy for the production of Intel's non-volatile memories and quickly expanded the production capacities. In his new role, he will be responsible for global production, ramping up new processes and expanding fab capacities.

Intel is still looking for a suitable manager for design engineering.  Until then, Josh Walden, who most recently headed the Intel Product Assurance and Security Group (IPAS), will lead this area.

Raja Koduri will continue to head Architecture, Software and Graphics. He is responsible for driving Intel's architecture and software strategy and product portfolio in the graphics area.

Nothing will change at the top of the supply chain either: Dr. Randhir Thakur will continue to report directly to Bob Swan as Supply Chain Officer.