Intel CEO Pat Gelsinger told Yahoo Finance Live he has over 100 companies in the pipeline that want the tech giant to produce the chips it designs.
“The industry needs the supply. Intel is stepping into that with leading-edge technologies for a globally balanced supply chain. This is good for the United States and it’s good for the tech industry,” Gelsinger said.
The chipmaker already has its first two customers in a budding foundry business, or the building of chips for others.
Intel (INTC) said this week it will begin making chips for Qualcomm and Amazon. Gelsinger declined to share the value of the deals, but noted the foundry business is a more than $100 billion market.
Now, Gelsinger just has to ramp up Intel’s infrastructure to turn that pipeline into cold, hard cash.
Intel committed itself to making chips for other companies in a bid to increase industry capacity back in March near the start of Gelsinger’s tenure as CEO. As part of that ambition, Intel is investing $20 billion to build new factories in Arizona.
More recently, the WSJ reported that Intel was eyeing a purchase of chipmaker GlobalFoundries for $30 billion. GlobalFoundries is among the biggest specialist players in the chip industry. The company was spun out of Advanced Micro Devices in 2008. It still counts AMD as a key customer, making any potential purchase by Intel (a rival to AMD) tricky.
Gelsinger declined to comment on the speculation around GlobalFoundries.
“I do think consolidation will happen, and I think we will be a consolidator in that journey,” Gelsinger said, adding that one can’t be a “little player” in the foundry market.
But it’s somewhat clear Intel may have to pull the trigger soon on buying a foundry as it looks to compete with Chinese behemoth Taiwan Semiconductor (TSM).
“I have set a goal that by the end of the decade we want to be the No. 2 player in that market,” said Gelsinger. “We expect this becomes a large growth opportunity for Intel over that period.”
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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