Intel is accelerating the restructuring of its foundry division to compete more aggressively in the AI chip manufacturing market.
The company has appointed former SK Hynix CEO Seok-Hee Lee as Executive Vice President of its foundry unit, reporting directly to CEO Pat Gelsinger and overseeing advanced packaging, systems integration, and back-end manufacturing. On the same day, former President Donald Trump announced that Apple has agreed to collaborate with Intel on designing and manufacturing chips within the United States. These dual positive developments drove Intel (INTC) shares up by 10%, reaching a new all-time high.
Strategic Reorganization: A Key Move
This appointment establishes advanced packaging as a standalone operational unit with its own dedicated leadership and strategic focus, marking a critical step for Intel in advancing its IDM 2.0 strategy and revitalizing its manufacturing business. Analysts view advanced packaging as a key technological differentiator for Intel, while Apple's involvement provides a long-term demand foundation for its foundry operations.
Leadership Appointment: Industry Veteran to Lead Packaging Strategy
The addition of Seok-Hee Lee brings crucial talent to Intel's foundry business. With a background as President and CEO of both SK Hynix and SK On, he possesses deep experience in managing large-scale technology and manufacturing organizations. Lee, who previously held engineering leadership roles at Intel earlier in his career, described his return as "a homecoming."
CEO Pat Gelsinger stated that advanced packaging and systems integration are becoming core capabilities for next-generation computing systems. Lee's expertise in operational execution and technical organization management will help Intel strengthen its systems integration capabilities, tightly coupling components like logic, memory, and networking to build high-performance computing systems for foundry clients.
As part of this realignment, former Foundry EVP Naga Chandrasekaran will continue reporting to Gelsinger, focusing on front-end technology development and manufacturing, with an emphasis on ramping up production for Intel 18A, Intel 14A, and future process nodes. This clear operational division between front-end and back-end aims to provide greater execution certainty for customers. Additionally, EVP Navid Shahriari announced his retirement following a 37-year career.
Advanced Packaging: A Crucial Arena in the AI Era
Intel's decision to establish advanced packaging as a distinct business focus reflects a structural trend within the semiconductor industry. As chipmakers enhance performance through multi-chip integration and packaging, the strategic importance of advanced packaging continues to grow, particularly for AI systems and high-performance computing.
In its statement, Intel specifically highlighted its EMIB-T and HBI advanced packaging technologies, noting it is driving them toward high-volume manufacturing phases. CEO Pat Gelsinger stated that Lee is "the right leader to build and scale this critical piece of Intel Foundry."
This appointment is the latest in a series of strategic moves for Intel's foundry business. Earlier this year, Intel brought in Shawn Han from Samsung to assist with its contract manufacturing efforts. In the same month, Tesla became the first major customer for its next-generation 14A manufacturing process, which is expected to enter volume production around 2029.
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