Re-engineering the Semiconductor Supply Chain with Intel CEO Lip-Bu Tan

00:11:08 · Lip-Bu Tan, Elad GilPlay from here

[00:11:08] S0: you think about that on a global basis? Yeah. Good question. So I think, clearly, the AI is changing the whole landscape. And I think the impact will be bigger than internet. And it's more profound also. So I think the AI initially is able to help you to do things more efficiently. And then with a lot of agents helping you to do things that is not kind of mundane that you need to do, but now they can give it to you faster. So in some way, I think it can drive a lot of efficiency. Even the semiconductor design, how much you can drive the efficiency in term of timing, how quickly can you come out, and secondly, the cost. And so I think those will be helping you to drive that. And then I think couple of bottlenecks for the AI demand and growth. One is, of course, everybody knows a power constraint. Some country, the power, they just don't have that. It get impacted. And then secondly, a lot of people didn't realize the helium impact can be also quite significant for semiconductor. And then thirdly, is everybody know right now memory is a bigger shortage, and everybody try to scramble for memory. And then even though you have to build a fab to capacity increase, it will take couple of years to do that. And same thing for CPU, GPU, and all this will be highly demanded. And I think the also the pricing also go up because we have to pass the price, the cost to the customer. Mhmm. So I think those will be the impact, the industry growth. [00:12:40] S2: Mhmm.

00:12:40 · Elad Gil, Lip-Bu Tan, Sarah GuoPlay from here

[00:12:40] S2: Mhmm. [00:12:40] S0: And then I think overall, I felt that, you know, the company that most impacted is you are not embracing AI. And because AI can help you to drive a lot of efficiency across all the different function of the enterprise. We should embrace and also find a way to better use the AI for your prediction, for your design, for your, you know, all the different part of the workload. And I think that's tremendous. [00:13:08] S1: A number of people would say the simplistic argument against TeraFab, against Intel Foundry being competitive is really a question of, you know, there's all the factors in terms of the building. Right? You describe IP and velocity of just how you're doing business. Then there are external factors. And, you know, Elad's talking about a number of them, but one of them is the the cost of labor and actually the manufacturing capacity. You know, in investing in the foundry business, you obviously believe there's a version where you can manufacture domestically, and Elon does too. Can you talk a little bit about that and how real that constraint is, the labor constraint? [00:13:47] S0: Right. So I think when I decided whether I should double down on foundry or should I get out of foundry, and I [00:13:56] S1: And there's a lot of voices. A lot of voices in [00:13:58] S0: the marketplace, as you can tell. [00:14:00] S1: It's very expensive.

00:14:00 · Sarah Guo, Lip-Bu TanPlay from here

[00:14:00] S1: It's very expensive. [00:14:01] S0: Very expensive. Gonna work. It's I finally decided this is very important for United States and also very important for the industry. And I'll give you the idea that we all live through these challenges of supply chain, and it's very important for any of the big company in semiconductor and really have to think about the supply chains. And you have to have a robust and resilient supply chain. You cannot just depend on one or two player in different geographical. And so I think more and more people are going to realize making in The United States is critical. And then the most advanced process, like for example, we have the, you know, 14A is like 1.4 nanometer, and we are already starting to plan for one nanometer and 0.7 nanometer. It's getting smaller and smaller. So in a way, it's much like our hair, so thin. So it's a lot of complexity. It's not that easy to do. And every step, if you make a mistake that you just go down, you know, go down the drain. So in some way, you have to be really precise in that manufacturing. So in some way, this has become more and more going to be the bottleneck. So we felt that we have a lot of respect for TSMC. We are a great partner. And then more important, we both need to have more capacity to serve the customer. And so I think we decided by the bullet, longer term, I think, is critical. And then that's where I can create more value for the industry. People have been

00:15:35 · Elad GilPlay from here

[00:15:35] S2: talking for a long time about eventually hitting a point of resolution where you can't really miniaturize things further. Like, the line width just gets too small to be able to keep going. When do you

00:15:47 · Lip-Bu TanPlay from here

[00:15:47] S0: think we actually hit that limit? Good question. So I think I can see, right now we have 18A, and then now going to production of 14A, I can see ten and seven. And so I think that path, I think we can get there, but couldn't it be more and more expensive and more difficult to do, and that's why we need partners. We cannot just do it ourselves alone, partner with a subscript vendor, partner with equipment vendors so that make sure that we can really drive those yield and performance. Yeah. And then the other part also really become the bottleneck is packaging, the advanced packaging. And so we all know about cohort by TSMC. Now we have a really good one called EMIP tea that is really next generation. I had to make sure that you become able to do in the production yield that meet the customer requirement. And now CMOS starting to run out of steam like you described. So right now, I also look at some new materials, so it become, going back to the material size or the chemical table. So gallium nitride, silicon carbide, and indium phosphide. So I invest in all three, and then looking at some of this new material, how can we really drive that? And then in terms of packaging, I starting to invest into glass. Glass is a very good heat insulator. So I invest a venture site called 3DGS, then I realized that Intel, we have like 1,000 pattern on the module. So how the, you know, subscript and the module put it together, and then we just announced a big program with Indian government to manufacturing in in India, plus in US and New Mexico. So I think this advanced packaging, very important. I also starting to look at artificial diamond, and that's another very good insulator. So I also invest into diamond foundry, and that's something is a next generation to look at. So new material, new subscript material, and new design methodology to drive that. So one thing good about being an engineer is you're always hitting the wall, then you find a way to either jump over the wall or you work around the wall, and then to get to the better result. And that's what I have been long time as an investor and building semiconductor from the EDA tool to design to manufacturing. It's kind of nice to have that experience. Now I can help find a way to make a small contribution to the industry. Yeah, and

00:18:16 · Elad Gil, Lip-Bu TanPlay from here

[00:18:16] S2: I mean, it's very exciting. And one of the reasons I'm asking about it as well is, to your point, there's always some things that you can vent around, but there are also physical limits where once you hit seven angstroms or whatever the limitation is, you start to run into [00:18:27] S0: New material. Yeah. You need to [00:18:28] S2: find new materials or find other workarounds. Yes. And then the interesting question is, and we've been talking about this for a long time. I remember twenty years ago, people were talking about how we'd eventually hit a point where we ran out of space on this, is do you run into some sort of asymptote that actually normalizes performance across different foundries or not? Yeah, good question. In terms of Moore's law, you say double and then [00:18:50] S0: the power and the cost. And then you can double the performance, but you cannot double down on the cost area. So those are the things you have to give way unless you find some new way of material, [00:19:05] S2: new way of design,