India brings opportunity for consumption, is the fastest-growing market : Intel's Steve Long

Steve Long, General Manager for Asia Pacific and Japan at Intel

Chipmaker Intel is on track to regain product and technology leadership by 2025. The Asia Pacific and Japan (APJ) region will drive this growth, with India being the fastest-growing market, according to a senior company executive. This comes at a time when Intel's business has started to rebound after a slump in recent quarters.

Over the past few years, Intel has lost its chipset leadership position to Taiwan Semiconductor Manufacturing Company (TSMC) and continues to face tough competition from AMD, Samsung, and most recently, NVIDIA for heavy-duty LLM-programming chipsets.

"APJ has a demographic advantage, I boil it down to having 50 percent of the world population. We are growing, our population is unlike other areas that are stagnant and declining," Steve Long, General Manager for Asia Pacific and Japan at Intel said, while addressing the media at the launch of the Intel Tech Tour in Penang on August 21.

"We're seeing all this play out in our gross domestic product growth. APJ is greater than the rest of the world. We're carrying the rest of the world, it's a responsibility in innovation…," he added.

Citing India's example and Intel's view of the opportunity, Long said that the country is the fastest-growing internet market in the world, with 400 million new users since the Covid-19 pandemic.

"It's a massive change in the country. We see this both as a domestic consumption opportunity, and also as an opportunity for India to change what they mean on the global stage. This is once in a generation kind of a thing," he said.

He also mentioned India's diversity, demographics, and strong services industry as highlights of the APJ region.

Since Pat Gelsinger took over as CEO in 2021, Intel has set out to achieve new goals, such as market leadership and setting up a foundry services business to manufacture chipsets for customers and rivals.

"When Pat (Gelsinger) rejoined Intel, five nodes in four years was our way of saying we will reclaim transistor performance per watt leadership by 2025. We're on track to execute that and you're gonna hear a lot More about this at Intel innovation here in the upcoming weeks at the end of September," Long said.

Long added that two of the five nodes are already ready.

A node is a configuration for semiconductor chip manufacturing indicating the interconnect pitch, transistor density, newer technology, etc.

Gelsinger, CEO, Intel, who joined virtually, said, "To get back into a leadership position, we will focus on three things. First, push the boundaries of what's possible through exceptional engineering, so you can deliver the performance you need where you need it."

"Secondly, we embrace limitless opportunities through collaborative innovation, so you can harness opportunities at the edge computing and with AI. And build a resilient and sustainable future you can confidently trust so you can address evolving needs. The possibilities are limitless. And it starts with Intel," he added.

This is the first time that the chipmaker has opened its semiconductor manufacturing factories to the media. Penang and Kulim in Malaysia are key to Intel's global supply chain, as they are the second largest end-to-end manufacturing hub outside of Israel.

As per media reports, Malaysia currently accounts for 13 percent of global chip packaging and testing.

Approach to democratising AI

Intel believes that the industry is racing towards artificial intelligence (AI), but it is still in a very early stage. However, AI will bring about a long-term, generational shift in how people use computing, according to Long.

He called it Intel's second major pillar to reclaim its market leadership.

Speaking of Intel's approach, he said, "We think AI is a workload and it's going to be across all compute types and different use cases and that's really important and foundational for how we're building our products itself."

Recently, at a roundtable in Bengaluru in India, Intel's Executive Vice President and General Manager for the Data Center and AI Group Sandra Rivera said that India has been essential to all of its critical programs, including CPUs, GPUs, artificial intelligence, accelerators, and FPGAs (field-programmable gate arrays).

Intel has over 14,000 employees in India, of which 3,000 are part of the company's Data Center and AI Group.

Intel's recovery

In its second quarter ended July 2023, the company started to see some green shoots after four consecutive quarters of decline in key business segments, including personal computers, with a quarter-on-quarter easing of the slump in shipments.

The company has now even increased Wall Street's forecast, estimating adjusted gross margins of over 43 percent in the third quarter, surpassing the Street's expectation of 40 percent.

Intel's foundry services business also grew 307 percent year-on-year (YoY) in the second quarter. The company recently restructured this business as a separate unit.

The company is currently expanding its Penang facility for packaging and testing, estimated to be the technology giant’s second-largest global facility. This was announced during the peak of the chip shortage in 2021. The company invested over $7 billion to set up the plant and expects to generate at least 9,000 jobs through it, including 4,000 jobs at Intel and 5,000 construction jobs.

(The correspondent is in Penang on an invitation from Intel.)