LONDON – Intel will not abandon manufacturing, despite pressures from investors, according to GlobalData. The firm will, instead, continue its hybrid manufacturing strategy to maintain the advantage of manufacturing on US soil.

On Jan. 21, Intel is likely to stress 10nm production of its latest processors is ramping up after three years of problems and delays, says the research firm. The company is also likely to report tangible progress in developing 7nm technology, although it will still likely need to outsource 7nm production until 2023.

“While the manufacturing problems with its 10nm process technology caused it to lose significant market share to rivals AMD and Nvidia, Intel has enough breadth and depth of technology, longstanding strategic customer relations, alliances and supply chain to be a serious challenger to these companies, as well as the prospective Qualcomm Nuvia combination,” said Cyrus Mewawalla, head of thematic research, GlobalData. “I would not bet against Gelsinger restoring Intel to something like its former dominance by 2025. In an era of geopolitical tensions between the east and west, the decades-long trend in the chip sector of outsourcing production is nearing an end. The fact that Intel continues to make its own chips on US soil will give it a strategic advantage over the next decade.”

Intel’s overriding focus in the future will be on the enterprise market for artificial intelligence systems, says Globaldata. According to Intel, enterprise AI is a $300 billion market, compared with the $30 billion PC market. A new architectural approach will be needed, as extending Moore’s law becomes more difficult and costly per transistor. This will involve tightly knit heterogeneous packages of general-purpose chips and function-specific circuits.

“The winners in the new data-centric age will be the companies that have the most comprehensive integrated product line-ups, the packaging skills, and the ability to design for and work with new third-generation materials,” said Mewawalla. “With strong Intel pedigree and a track record of success at VMware, Intel’s new chief executive Pat Gelsinger is the right choice to spearhead the company’s much needed restructuring and plot its course through the AI era.”

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