Intel CEO Pat Gelsinger told Yahoo Finance Live that he has more than 100 companies in the pipeline that want the tech giant to produce the chips it designs.
“Industry needs the offering. Intel is stepping in with advanced technologies for a globally balanced supply chain. This is good for the United States and it is good for the tech industry,” Gelsinger said.
The chipmaker already has its first two clients in a burgeoning foundry business, or building chips for others.
Intel (INTC) said this week it will make chips for Qualcomm and Amazon. Gelsinger declined to share the value of the deals, but noted that the foundry business is a market worth more than $100 billion.
Now Gelsinger just needs to ramp up Intel’s infrastructure to turn that pipeline into cold, hard money.
Intel has committed to making chips for other companies in a bid to increase the industry’s capacity at the start of Gelsinger’s tenure as CEO in March. As part of that ambition, Intel is investing $20 billion to build new factories in Arizona.
More recently, the WSJ reported: that Intel was planning to purchase chipmaker GlobalFoundries for $30 billion. GlobalFoundries is one of the largest specialist players in the chip industry. The company emerged from Advanced Micro Devices in 2008. It still sees AMD as an important customer, which makes any potential purchase by Intel (a rival to AMD) difficult.
Gelsinger declined to comment on the speculation surrounding GlobalFoundries.
“I think consolidation will happen, and I think we’re going to be a consolidator on that journey,” Gelsinger said, adding that you can’t be a “small player” in the foundry market.
But it’s somewhat clear that Intel will soon have to pull the trigger to buy a foundry, as it appears to be competing with Chinese giant Taiwan Semiconductor (TSM).
“I have set a goal that we want to be the No. 2 player in that market by the end of the decade,” Gelsinger said. “We expect this to be a major growth opportunity for Intel during that time.”