Intel Splits Manufacturing Division Into 3 Groups

Intel Shakes Up Manufacturing Group

Over the past couple of months, things have not been going that well at Intel. The main problems are coming in from their manufacturing group, with delays to 10nm and shortages of 14nm chips. Despite the issues, the company has been chugging along financially. However, the way things are has to change. To shake things up, the company is reorganizing their manufacturing division. Instead of the monolith approach, the division now has 3 separate groups.

One of the strengths of Intel is their vertical integration. By doing everything in-house from R&D, Design and Manufacturing, the company has a lot of control over costs and timelines. This has served the company well when Tick Tock was moving along smoothly. At the same time, it can cause issues where part of the chain breaks down. For instance, with the current debacle, the 10nm delays in R&D and Manufacturing is having ripple effects on 14nm Supply and Manufacturing. Due to the tight integration, Intel has no third party fab to turn to for help. It would simply cost too much time and effort.

All 3 Groups Still Report to Same Leader

A possible reason for this move is to reduce strategic vulnerability. By breaking the overall monolith, into 3 parts, there can be greater flexibility. The 3 groups are Technology Development, Manufacturing and Operations, and Supply Chain. By breaking these dependencies, Intel can turn to third-party Manufacturing easier if supply is low, or if Technology Development is holding things back.

Despite the split, Intel will still be very tightly integrated from top to bottom. The new groups will still report to one overall manufacturing division leader. However, by breaking things up, each group could have more freedom to pursue their own needs, while keeping the overall picture in mind. Hopefully, this will mean fewer delays in the future. While Tick Tock is dead, there is a chance that PAO might still come back to life.