Intel has taken a bold step to strengthen its contract manufacturing arm by hiring Seok-Hee Lee, a renowned expert in the semiconductor industry, as the executive vice president to lead Intel’s advanced packaging business. The move, which was announced on Thursday, reflects a redoubled effort by Intel to assert its role as the dominant force in the chipmaking business at the helm of CEO Lip-Bu Tan, who has been carefully steering Intel’s business since he was installed as CEO.
This strategic appointment is a most opportune one. Apple will also design and manufacture its chips on U.S. soil, President Donald Trump said earlier in the day. The move comes as Intel faces one of its most important transitions in a five-decade history – trying to get back on board after being surprised by the artificial intelligence revolution that has transformed the semiconductor industry.
Lee’s hiring is not just a new hire for the executive ranks, but Intel’s understanding that Package is a key area of semiconductor innovation. The traditional scaling of transistors encounters new physical challenges, so the field has shifted to more complex packaging methods that combine multiple chips into a unified package. By combining this with the use of lithographic improvements, manufacturers can further optimize performance, lower power consumption and increase functional density. Under the guidance of Lee, all aspects of the advanced packaging, system integration, back-end technology development and manufacturing of the back-end will be supervised. His experience in semiconductor industry, such as CEO of SK On and SK Hynix, is extremely strong to deal with the complicated relationship between the packaging innovation and manufacturing strategy.
This hire is significant in the light of recent Intel restructuring. Naga Chandrasekaran, who led Intel Foundry as an executive vice president, will now focus solely on front-end tech development and manufacturing. With this split, Chandrasekaran will be more concentrated on Intel’s 18A, 14A and future process technologies ramp, while Lee will take his packaging skills to the vital back end operations.
Intel has been methodically building a team of leadership to make the vision of the foundry a reality. The company also hired in April Shawn Han, a veteran of Samsung’s foundry business, to strengthen its contract manufacturing business. Another big development came in the same month when Intel acquired Tesla as its first major customer for its next-generation 14A manufacturing process, which chips are slated for mass production by 2029. The moves altogether are a clear sign of Intel’s resolve to build a strong position in the contract chip-manufacturing market, which is traditionally held by Taiwan Semiconductor Manufacturing Company and Samsung.
In the last decade the semiconductor industry has experienced a tremendous transformation and the advanced packaging process has gained importance as a key element in the future evolution of the industry for further performance enhancement. As transistor makers hit the limits of silicon, the observation that the number of transistors doubles roughly every 24 months known as Moore’s Law is increasingly being tested. This fact has transformed packaging technology from a supporting part to a catalyst for innovation, which allows chip manufacturers to integrate special functions like logic, memory and analog circuits into single packages that allow them to deliver functionality that could not be achieved with conventional monolithic designs.
Lee brings an additional layer to Intel’s decision-making process as he has broad experience in the memory semiconductor industry. His experience at SK Hynix, one of the world’s leading memory chip makers, offers a great insight into how logic and memory technologies work. The close coupling of processing units and memory subsystems is a key component of modern computing systems, and Lee’s work may be pivotal as Intel’s packaging solutions continue to evolve to better utilize this important relationship.
The partnership with Apple is a particularly good endorsement of Intel’s foundry business. The two companies’ partnership has changed considerably over the years, with Apple moving towards bringing to market many of its Mac lineup using in-house designed and built custom silicon from TSMC. The company’s cooperation with Intel on the design and production of semiconductor chips in the United States is a significant change that may impact the domestic semiconductor industry. The partnership is in keeping with the broad national goals of Washington to enhance American semiconductor capabilities, which have been endorsed by both parties in Congress.
Intel’s foundry plans aren’t just for marquee customers such as Apple and Tesla. The company has emerged as a full-service semiconductor manufacturing partner that can support customers from large established semiconductor companies to small start-ups. This approach requires up-to-the-minute process technology, which Lee will provide, as well as a highly developed packaging technology, which Lee will manage, and a highly reliable supply chain and design work, which Intel is building under the direction of Tan.
Nations have come to understand the significance of their own semiconductor manufacturing capabilities, so the semiconductor foundry market has become increasingly strategic. During the Covid-19 pandemic, weaknesses in global supply chains revealed the necessity of revisiting global reliance on foreign manufacturing of semiconductors. The United States has responded with a number of policy measures to rejuvenate domestic chip manufacturing such as the CHIPS and Science Act that offers extensive incentives for companies to invest in U.S.-based chip-fab facilities.
Advanced packaging and leading process technology are two of Intel’s priorities, and the company understands that semiconductors need to be at its best on many fronts to meet today’s requirements. The company has been investing heavily in research and development efforts in its portfolio and has introduced innovative packaging technology like its three-dimensional stacking solution Foveros and its bridge-based solution for connecting heterogeneous components EMIB. The technologies are key differentiators in Intel’s foundry portfolio, and could compel customers to switch from traditional foundry partners.
Under Tan’s direction, Intel is continuing on with its turnaround plan, and the addition of experienced managers such as Lee appears to be a step-by-step plan for rejuvenating Intel’s manufacturing operations. Strategic leadership decisions are of critical importance in the semiconductor industry, given the importance of capital investments and the long product cycles. Lee’s background dealing with the ups and downs of the memory market may be useful when Intel faces the significant investments to be competitive in the foundry business.
