Today's event includes forward looking statements, which are based on our current expectations and subject to risks and uncertainties. Please refer to today's press releases and our most recent 10 ks filing for more information on the risk factors that could cause actual results to differ materially.
Good afternoon and thanks for joining. I am So excited to give you my perspective on the tremendous opportunities ahead of Intel and the plans we are putting in motion. As many of you know, I spent 4 decades in this industry, 3 of those at this great company. And now, I have returned to my dream job as Intel CEO. I often say I grew up in the hallways of Intel, trained at the feet of its founders and driven and inspired by how technology has the power to improve the life of every human on the planet.
My first few weeks back have been exhilarating. I've been deep diving with our teams across the globe and engaging with many of our customers, Partners and investors, I've seen the technical work and progress of our team and analyze the data. Our team is fired up And I have full confidence that Intel is in a very strong competitive position and our best days are ahead. Technology has never been more important for humanity. The entire world is becoming digital, driven by 4 superpowers, the cloud, connectivity, artificial intelligence and the intelligent edge.
In this landscape of rapid Digital disruption, which has been accelerated even more by the global pandemic. Intel's technology and leadership products are more critical than ever. We are the only company with the depth and breadth of software, silicon, platforms, packaging and process With at scale manufacturing, our customers depend on for their next generation innovations. To meet this moment and position our company for the future, I am setting a course for a new era of innovation and technology leadership. Today, we are unleashing the iconic Intel innovation engine.
As I have previously outlined, We are focused on 4 areas to deliver leadership products and digital innovations in the years ahead. 1, Be the leader in every category in which we compete. 2, execute flawlessly to our commitments. 3, passionately Innovate with boldness and speed. And 4, reignite the culture to attract and motivate the best engineers and technologists on the planet.
Our plans to drive these priorities are already taking shape. Let's start with a progress report on 7 nanometers, a Pivotal aspect of how we're engineering the future. And from there, I'll discuss how we are putting our foot on the gas with our IDM model and our product roadmaps. We've previously discussed how we identified and resolved an issue on 7 nanometers, which is our next generation process technology intercepting our 2023 Let me go click deeper on that today. When Intel initially designed 7 nanometers, EUV was still a nascent technology, so we developed our process to limit the use of EUV, But this also increased the process complexity.
As EUV then matured and became more reliable, the domino effects of our 10 nanometer delay, which pushed out 7 nanometers and ultimately put us on the wrong side of the EUV maturity curve. Today, I'm pleased to share that we have now fully embraced EUV. We've re architected and simplified our 7 nanometer process Increasing our use of EUV by more than 100%. We have a very strong partnership with ASML And our plans to now stay on the leading edge of EUV usage are well underway. Our technology teams are moving rapidly through process maturity And as they do, our confidence in 7 nanometer health and competitiveness is accelerating.
Leveraging our 7 nanometer process, We are advancing the development of lead data center and client CPUs, starting with our Meteor Lake, our high volume 2023 client product. In fact, we expect to tape in our 7 nanometer compute tile for Meteor Lake in the Q2 of this year. Meteor Lake features a breakthrough new X86 architecture and modular design, utilizing multiple manufacturing processes across our XPU IPs as well as Intel's advanced Foveros packaging technology. This speaks to a larger industry transition as customers' needs and workloads diversify and grow in complexity. The world will move from system on a chip to system on package, and Intel's unquestioned leadership in packaging technologies becomes even more valuable, Being able to expertly construct the best products using the best technologies is a critical differentiator for us and one That delivers enormous value for our customers.
Let's look at 2 examples of how Intel is driving innovation in this space, Boveros and Emed, for those not familiar with Boveros, this is our breakthrough 3 d packaging technique that allows us to stack various vertically, including high performance logic such as CPU, graphics and AI processors for the first time. Foveros gives us the flexibility to mix and match various IPs, while optimizing for performance and power efficiency. Another leading Intel only packaging technique is embedded multi die interconnect bridge or simply EMID. It's an elegant, performant and cost efficient way of connecting multiple heterogeneous tiles on a single package, A great example of an Intel product that leverages both capabilities is Ponte Vecchio, our XPU for exascale and AI. Ponte Vecchio is an excellent demonstration of our ability to combine multiple process technologies, both internal and external With novel packaging technologies to uniquely tailor products to customers' markets and needs.
It uses more than 40 different tiles integrated into a single package. This package is a diverse combination of more than 100,000,000,000 transistors Manufactured in multiple process technologies and packaged using both Foveros and E MIB and here Ms. Pontevecchio. 13 years ago, IBM introduced the world's first petaflop supercomputer, which filled an entire very large room. Now, right here in my hand, I have a petaflop Torrey's Aurora exascale computer driving foundational scientific breakthroughs, innovation and discovery.
Its unique construction enables us to use leading edge process technology where it delivers high ROI and performance and or density. This construction also allows us to swap out individual tiles based on customer needs for performance or to enable lower power or cost, while keeping all the other tiles the same. This really speaks to the strength of our packaging capability, which is core to our IBM advantage. Intel has a unique ability to bring together software, silicon and platforms, packaging and process with At scale manufacturing for our customers. That brings me to the core of today's announcements, which is right at the heart of Intel, Manufacturing.
I'm excited to share the next major evolution of Intel's integrated device manufacturer or IDM model. I call it IDM 2.0. We have always been in the business of defying physics and Building the future and that's not going to change. Intel is and will remain a leading developer of process technology, Churro Semiconductors and the leading provider of silicon globally. IDM 2.0 is the leadership combination of 3 factors.
First, Intel's internal factory network, integrated manufacturing has been foundational to our success enabling product optimization, Improved economics and supply resilience. As I mentioned on the January earnings call, we will continue to build the majority of our products in Intel fabs. 2nd, we will also expand our use of 3rd party foundry capacity across our portfolio to deliver the best products in every category that we participate in. Intel's complementary and strategic use of outside foundries It's an underappreciative fact. Today, we use foundries to manufacture many products, including chips for communications, connectivity, graphics and chipsets.
As we grow the business, we expect our engagement with foundries to grow in both size and scope. This includes manufacturing a range of modular tiles on advanced process technologies, including products at the core of our compute offerings for both client and data center segments. To further enable this aspect of our IDM 2.0 model, we are increasing our engagement with TSMC, Samsung, GlobalFoundries and UMC, building on our existing long term relationships. This will provide us with increased flexibility and scale we need to optimize our roadmaps for cost, performance, schedule and supply, giving us a unique competitive advantage. But there's more.
Our IDM 2.0 model has an important third element. Today, I'm announcing our plans to be a world class foundry business and a major provider of U. S. And European based capacity to serve customers globally. The digitization of every industry is accelerating the global demand for semiconductors at a torrid pace, But a key challenge is access to manufacturing capacity.
Intel is in a unique position to rise to the occasion and meet this growing demand while ensuring a sustainable and secure supply of semiconductors for the world. We conservatively sized the foundry opportunity as a $100,000,000,000 addressable market by 2025, With most of the growth coming from leading edge computing, which is our expertise, the majority of leading edge foundry capacity is concentrated in Asia, While the industry needs more geographically balanced manufacturing capacity, Intel's advanced manufacturing scale, including operations in the U. S. And Europe is critical for the U. S.
And the world, and we will significantly grow our global operations, starting with increasing our U. S. And European centric manufacturing capacity to serve the growing demand. We are committed to ensuring this capacity will support commercial customers as well as address unique government and security requirements in the U. S.
And EU. To deliver this vision, we are establishing Intel Foundry Services, a fully vertical stand alone foundry business led by semiconductor industry veteran, Doctor. Randir Thacker reporting directly to me. This business unit will be completely dedicated to customers with full P and L responsibilities. This model will ensure that our foundry customers' products will receive our utmost focus in terms of service, Technology enablement and capacity commitments.
We will be differentiated from other foundry offerings with a combination of leading edge Packaging and process technology, committed capacity in the U. S. And Europe, available for customers globally and a world class IP portfolio that customers can choose from including x86 cores, graphics, media, Display, AI, interconnect, fabric and other critical foundational IP along with ARM and RISC V Ecosystem IPs. Intel Foundry Services will provide access to silicon design services to help our customers seamlessly turn silicon into solutions using industry standard design packages. We are ready to engage with customers Today, starting with our existing foundry offerings and we are expanding imminently to include our most advanced technologies, which are optimized for cutting edge performance, making them ideal for high performance applications.
We have already received enormous enthusiasm and Statements of support from across the industry, including Amazon, Cisco, Ericsson, Google, IBM, IMEC, Microsoft, Qualcomm and so many more great names. And to give you a firsthand perspective, I'm super excited to welcome a very special customer, friend and long term Intel partner, Microsoft CEO, Satya Nadella.
Hello. Thank you so much, Pat, for that warm welcome. It's an honor to be here with you at Intel Unleashed. Microsoft and Intel have a deep history of innovation and partnerships spanning hardware, software and the cloud. In fact, it's no exaggeration to say that the products We made possible together over the last 3 plus decades have impacted nearly every aspect of our lives, at home, at work, at school and everywhere in between.
Today, we are entering a complete new era as computing becomes embedded in our world. How we interact with people, places and things is fundamentally changing. We're going through these radical changes in compute architecture from the materials To the semiconductors, to the systems across the cloud and the edge, this new era will require new innovation across the entire Stack from the silicon to the systems. It will require technology that adapts as customer workloads change. It will require technology That is secure against increasingly sophisticated attacks.
It will require deeper partnership than ever before. As chips become more specialized and cloud architectures become more optimized for new workloads, we will need to collaborate to co design the next Generation of systems from the hardware to the systems to the software. That's why we are so energized by your and Intel's vision for IDM 2.0. We applaud your continued investments, both in leveraging the best of what is available around the world and in offering new options for silicon designers that will increase manufacturing here in the United States. We are excited to build on our partnership as Intel embarks on this next chapter, And I'm looking forward to what we will achieve together and the new opportunities we'll create for our customers going forward.
Thank you so very much. Back to you, Pat.
Thanks, Satya. The early enthusiasm for the foundry capabilities we can provide is exciting, But it's only one piece of the puzzle. Capacity is also critical. That's why I'm thrilled to announce our plans For Intel's 1st large scale foundry operation, which will be in Arizona, we plan to build 2 new fabs in Arizona located Expanding requirements of our current products and customers and provide committed capacity for foundry customers. This represents an investment of approximately $20,000,000,000 which will create over 3,000 permanent high-tech high wage jobs and over 3,000 construction jobs and 15,000 long term jobs in Arizona.
Intel values business environments and policies across the globe that encourage investments in semiconductor innovation and manufacturing. To make our new expansion in Arizona possible, We are excited to be partnering with the state of Arizona and the Biden administration on incentives that spur this type of domestic investment. Today, we are announcing Arizona and I expect that we will be ready to announce our next phase of expansions in the U. S, Europe and other global locations within the year. With these plans, we will accelerate capital investment to meet our existing customer requirements, as well as the customer response and our ambitions for leading process technology on Intel Foundry Services.
To put Intel's R and D and capital investments in perspective, our new Arizona investment adds to our many 1,000,000,000 of dollars invested in the U. S. And globally. For example, from 2019 through 2021, our U. S.
Investments will total approximately $27,000,000,000 in R and D And $33,500,000,000 in CapEx. We estimate these investments are creating as many as 25,000 U. S. Jobs, an important step in support of the growth of the U. S.
Economy. We also continue to invest in and expand our manufacturing capabilities globally. For example, together our R and D and CapEx investments in Ireland and Israel will total nearly $17,000,000,000 From 2019 through 2021, Intel's global advanced manufacturing and scale is also critical for the U. S. Government to have a Domestic source of state of the art electronics.
To that end, we are honored to be competing right now for the U. S. Department of Defense contract To develop a domestic commercial foundry that will also meet the security needs of the U. S. Government, Intel has an established track record of Success partnering with the U.
S. Government to support critical advanced computing programs. We believe we are the right partner for the U. S. Government With our leadership technology, existing U.
S. Manufacturing footprint and a strong ecosystem of suppliers and innovators, We are committed to advancing U. S. Competitiveness for the future of the country. Finally, we are driving collaboration across the industry to advance design and IP capabilities as well as research and innovation to accelerate our efforts.
We know our process technology must allow for easy design access and porting from other foundry platforms. To that end, We are making tremendous investments in developing industry standard PDK models, simplified design rules and building on our EDA partnerships with both Cadence and Synopsys to enable their design tools for our Intel Foundry services. We will also make investments in our own competitive foundational IP complete with standard interfaces as well as 3rd party IP availability. And To expedite our R and D innovation, I am proud to announce plans for a new research collaboration with IBM, which is focused on advanced silicon process and packaging technology, both are foundational elements of manufacturing leadership And Intel and IBM have been incredible sources of related innovation over the last 30 years. To tell you more about it, It is a true pleasure to welcome IBM CEO, Arvind Krishna.
Arvind?
Thank you, Pat, And congratulations once again for being named CEO and for the bold strategy you have put forward for Intel. It's my pleasure to address our friends at Intel. It's great to be partners with another iconic company That, like IBM, has a long tradition of creating game changing innovations for the industry. As you know better than me, Andy Grove talked about strategic inflection points, periods of profound change in an industry or business. I fundamentally believe we are in the middle of such a change and the technology is driving the next technological revolution, Hybrid cloud, AI, 5 gs, the intelligent edge, quantum are all together Going to help unleash the potential of data and advanced competition that will create immense economic value.
But no one company, no matter how significant, can create and bring to bear all of these powerful technologies on their own. To succeed, the future of technology has to be built on a foundation of deep industry collaboration. This is why I am so excited about our plans to collaborate on critical leading edge research that will advance silicon and packaging technology development. This represents an important milestone in the world of technology By bringing together 2 of the best semiconductor research organizations in the world, we will greatly accelerate innovations in the semiconductor industry. Let me also express our support for Intel's decision to expand and bring A new foundry business that will bolster the United States' competitiveness in semiconductors.
We also understand the importance of developing a more secure supply chain. It's of vital importance for our economy And for national security. And this is why we strongly support key United States government initiatives that are aimed at enhancing domestic chip making. Intel and IBM are the right partners for this new era. We share a long and rich history.
Over the past many decades, our 2 companies have left a profound mark on the world of computing by delivering some of the most Advanced semiconductor technologies. We share a deep commitment to scientific research, a true respect for brilliant engineering And a focus on bringing critical innovations to the world that transform entire industries. So to Pat and the entire Intel community, Thank you for your partnership. We welcome your scientists and engineers into our R and D centers in New York, And I look forward to seeing the tremendous value we will create as our best teams work together to tackle some of technology's hardest problems.
Thanks, Arvind. This collaboration puts 2 of the best semiconductor research organizations together to accelerate the velocity of packaging and process innovations into the future. Taken all together, our IDM 2.0 plans will put us on The path to restore process performance leadership and build on our leadership packaging technologies, delivering our customers leadership products in Every category that we participate in ensure superior capacity and supply resilience with flexibility leveraging our internal and external capacity, all with a superior cost structure. We're now taking all these advantages to also serve customers as a world Class foundry business. This incorporates key learnings based on what we know foundry customers demand, including a dedicated business unit, committed capacity and a world class IP portfolio.
In summary, IBM 2.0 means Leading process, product, supply and cost, a differentiated and winning formula. Now let's talk about what this means for our product roadmap. We remain focused on delivering a steady cadence of leadership products to our customers As we transition from monolithic to system on package designs, as we evolve from CPUs To a broader portfolio of XPU spanning multiple architectures and as we leverage both internal and external manufacturing, We are positioned to lead in every category that we participate in. Today, I'll focus on the CPU roadmap. Starting with our client CPU pipeline, Tiger Lake continues its strong ramp with nearly 30,000,000 units shipped, Supporting 150 available designs with over 400 Tiger Lake designs expected this year, including Nearly 100 verified EVO designs.
And later this year, Alder Lake, which has started sampling the customers, We'll deliver breakthrough architectural advancements for desktop PCs followed by mobile. Overall, we expect that in the Q3 of this year, the majority Of our client CPU wafer starts will be on 10 nanometer, including our SuperFin process, shifting gears to the data center. In 2 weeks, we'll officially launch our new 3rd Gen Xeon Scalable Processors or Ice Lake. With the Ice Lake platform and our data centric portfolio, we deliver incredible flexibility for our customers and continue our vision of delivering AI everywhere from edge to the cloud. We engage in exciting collaborations with customers like Korea Meteorological Administration to deliver 50 petaflops of performance With Baidu for their AI cloud server and with Alibaba Cloud for their 7th Gen ECS Cloud Server.
There are many more to come. This co engineering helps our customers achieve more, more performance, more efficiency. Our next generation data center product, SAPPHIRE RAPIDS, will deliver even more performance and capabilities. We have customers testing SAPPHIRE RAPIDS now and we'll look to reach production around the end of the year, ramping in the first half of twenty twenty two. I'll briefly touch on our 2023 CPU product roadmap, which includes Meteor Lake for client and Granite Rapids for data center.
Both Meteor Lake and Granite Rapids will have compute tiles built on Intel 7 nanometers and the strength of our new IDM 2.0 model means We can strategically use the breadth of our ecosystem to our advantage. For our 2023 roadmap, we will also leverage our relationship with TSMC to deliver additional leadership CPU products for our client and data center customers. This is the power of our new IDM 2.0 model combined with a modular approach to design and Intel's industry leading packaging capabilities. As you can see, we're moving full speed ahead, taking the right steps and making the right investments to position Intel for long term success. I am confident that we are setting the right course for Intel and we are off to a strong start to the year.
For Q1, we expect to exceed our prior guidance of both the top and bottom line, driven by continued strong notebook demand. At the same time, 2021 is a transitional year as we accelerate our trajectory, invest in our future and improve our execution. This is reflected in our full year guidance, which is summarized here. We continue to see very strong demand for our PC products with both TAM estimates and Intel client CPU supply up double digits. At the same time, our 2021 forecast Reflects the industry wide shortage of critical third party components such as substrates as well as uncertainty associated with entity list restrictions.
We are working aggressively with our supply chain partners as well as leveraging our own unique manufacturing capabilities to solve for component shortages. Given the incredible demand for computing, the strength of our IDM 2.0 strategy and the technology investments we're making, I'm certain Intel's best days are in front of us. You can find more details on our guidance in our press release and the 8 ks we filed this afternoon. And there's one more exciting announcement to share today. As we execute to deliver incredible innovation and leadership products, We are as committed as ever to keeping the technology ecosystem informed and involved.
It's been almost 24 years since I addressed The industry at our very first Intel Developers Forum, IDF grew to be an incredibly popular event for the tech ecosystem. It was the place for lovers of technology like me to gather and geek out about the future. I'm thrilled to announce That we are bringing the spirit of IDF back this year with the launch of a new event series called Intel ON. If you're a geek like me, Join me at our Intel Innovation event in San Francisco this October. In summary, as you've seen from today's updates on 7 nanometer and next Generation products as well as our exciting IDM 2.0 announcements, Intel is firing on all cylinders.
Our strategy and execution are accelerating. There is a renewed sense of energy and excitement inside Intel that is building, Excitement that our employees, partners and customers are not only seeing, but echoing. Our customers and partners Want intel to win, want more of what we provide and are eager to deepen our engagements. Today is the first step, And we are just getting started. Now let's take some of your questions.
Welcome to our Q and A session. First, I'd like to introduce the other Intel executives joining me to take your questions. We have Doctor. Anne Kelleher, Senior Vice President and General Manager of Technology Development and George Davis, our Executive Vice President and Chief Financial Officer. Thank you both for joining me today.
I also want to mention 2 others who play pivotal roles in our IDM 2.0 strategy. First, Kevan S. Farjani, who's Senior Vice President and General Manager of our Global Manufacturing and Operations and Doctor. Rand Deer Thacker, the newly appointed President of Intel Foundry Services. Rand Deer and Kevan are in Arizona today, Marking today's announcement are ribbon cutting ceremony there of our significant expansion and I'm very excited to share that Arizona Governor Doug Ducey, Several state and local Arizona government officials and U.
S. Secretary of Commerce, Gina Raimondo, participated to express their support as well. And with that, I'll turn it over to the operator to take the first question, please.
Our first question comes from the line of Mike Rogaway From Oregonian Newspaper, your line is now open.
Hi, can you hear me?
Yes, Mike. What do you have to ask us today?
Yes. This isn't Intel's first shot
at foundry. There's a big push in that direction about 7 years ago. What didn't work back then? And why is it going to work this time?
Hey, thanks very much, Mike. And first, I'd say the market is really different today. And as you've seen extraordinary demand for semiconductors, strong interest on the part of US and European institutions and governments. I'd also say that our first efforts were somewhat weak, and we learned a lot through them, but we didn't really throw ourselves behind them. As you've heard today, With our major capacity investments, a separate organization, a separate P and L reporting directly to me, we're going after this much more aggressively.
Also, we're bringing together the leading process and packaging technology, the best that we have to offer It's going to be made available to our foundry customers and a world class IP portfolio of industry IP, But bringing together the Intel IP, graphics, AI, interconnect and X86 cores, we're putting it all on the table. And imagine if you were a major cloud service provider saying, boy, I have tens of millions of Cores that are running and now I can optimize them for my business and add some of my stuff and maybe take out some things that I don't utilize. This is a powerful strategy and we believe that now is the time for Intel Foundry Services and I'm committed to make this a huge success
Thank you. Our next question comes from the line of Ross Seymore from Deutsche Bank. Your line is now open.
Thanks for all the details. Kind of a follow-up to the first question. What do you envision the profile of
Yes, it was a little bit hard to catch all of it. But let me I think I caught enough of it. And definitely, we see this foundry opportunity as something that is Highly supported by the industry. And as you've seen, 20 different companies saying, boy, this is good, this is good, we support it. So we're seeing a lot of commercial Chris, but we're also seeing strong government interest and that really is being seen by the incentives, the accelerants that they see the critical nature of Balancing the global supply chains and the needs and we've seen that in both US as well as Europe.
We also see the interest from the government customers Such as the DoD customers who need a on U. S. Soil or on European soil supply chain that is trusted and in And in some cases secured as well. And as we mentioned in our comments, we're participating in the ramp and ramp C programs. We're also looking forward to the CHIP Act and how that might further accelerate and the EU has laid out some strong proposals for their Critical role that semiconductors play for the entire tech industry and frankly for the world as everything is becoming more digital.
And we are saying Intel is stepping into that gap aggressively to help provide the capacity that's needed US, Europe
and worldwide.
Our next question comes from the line of Brian Santo from EE Times.
So we're talking about leading edge processing. Leading edge these days is considered to be 7 moving to 5 and Some of your competitors are and partners already working on 3. Can I get you to comment on How Intel expects to go beyond plans to go to 7 which you had just outlined earlier?
Yes, thank you. And there's a couple of things I really want to say. We feel good now about how we've Right of the ship and 7 nanometers is on a good course. And with that, our 2023 roadmap, we see a very solid execution against that. But as we've also said, we are turning up the clock rate and we're going to go faster with our process technology developments and moving to a yearly cadence with those capabilities.
And we have a rich pipeline of capabilities and components research as well as our Standard portfolio now with the IBM partnership that we announced as well. So in addition to that, I love to ask Ann Kellerer, Who's taken over our logic technology development and just really driving the manufacturing discipline that she brought to that role and bringing it to our process technology development. So Anne, if you might add a few comments as well.
Thanks, Pat. I'd be happy to. Since July, we have been very focused on enhancing our use of EUV On 7 nanometer and in our future nodes. And we've also been very focused on streamlining our process and reducing our complexity. And based on the results that we've achieved over the last three quarters, I'm very pleased with it.
We've also focused on our process development methodology, and that has helped enable us achieve those results over the last three quarters, but will also enable us To deliver predictably our innovations going forward, we have many of the world's best and innovative engineers within GD. And as a team, we're very much focused on delivering process performance as we progress from node to node. We're also very focused on maintaining our packaging leadership in our advanced packaging. Also, as Pat mentioned, our components research. We have a really strong pipeline of innovation coming from components research into our development world.
And today's announcement With IBM, basically is focused on research to continue to open up that pipeline and feed into our development as well. So overall, I'm very optimistic and we'll be sharing more on our process and packaging later this year.
And as I said, we're just thrilled by Ann's leadership as we're bringing this execution discipline to process technology, Building on our package leadership and setting a roadmap to parity and sustained leadership into the future, we're back on track and we're excited about the capabilities that we'll be bringing to our customers internally as well as with our foundry customers as well. Next question, please.
Thank you. Our next question comes from the line of Matt Ramsay from Cowen. Your line is now open.
Yes. Thank you very much. Good afternoon. Pat, a lot of the questions here, I think, will focus on your own IBM model and the new announcements you've made on foundry, but I wanted to ask a few questions about your view of The architecture roadmaps going forward, Intel historically has been a little bit slower to move to things like 64 bit integrated memory controller And most recently, the chiplet architectures that some of your competitors have adopted. And while we're talking about where things are manufactured, I think it's just as important So maybe you share your views as an external partner at VMware and now leading Intel as to what the technology roadmap looks like around things like Heterogeneous dye and the threats maybe for the CPU market for smart NICs and DPUs and things like that, because I think that's important to the progress going forward
Sure. Hey, there's a lot in that question. We could spend about the next hour unpacking that fully, but let me make a few general comments coming in. The first is, we have to have a healthy CPU roadmap, period. And one of the things and seeing Sunil come back to the company is reestablishing that Tick tock discipline.
And as you said, the 'twenty one, 'twenty two, now we've solidified the 'twenty three roadmap. And Sunil and I are digging in to say 'twenty four, 'twenty five Unquestioned leadership at the architecture level as well. And as you say, hey, we were slow on some of those transitions before. We are out to be unquestioned leaders at the CPU, but Intel has also laid out an XPU strategy where we're going to be focused AI and graphics and networking as well. And those areas are ones that we have solid positions, but trust me, we're going to accelerate the investments that we have In those areas to have unquestioned leadership in each one of those areas of the portfolio, we got a lot of work to do.
One of the cool things that I found when I came back was that even though there were some issues in the process technology, the 3 d packaging technology, Perfect. Unquestion leadership and this gives us the ability to not be doing chiplets, but to be doing Tiles, as I described it, because of that packaging technology, we don't have to buffer, right, interconnect. It's actually like a long wire on chip. And that Packaging technology is part of what gives us a really cool advantage in the next generation of our process roadmap, where we're going to be able to mix and match Tiles from different process technologies, but bring them together as if they were one single chip and we'll be moving from system 1 chip To assist the 1 package, and this is part of the capabilities that's now fully embraced in our roadmap. You saw it in the Ponte Vecchio That I showed off the 23 roadmap makes fundamental use of this across the server and the client portfolio And we'll be mixing and matching the XPU components into a single solution for the industry.
And as I said in my opening remarks, World leadership means you have software leadership, Intel's the best, process and packaging, architecture and platforms With at scale manufacturing, that's something only Intel can provide to the marketplace and we're getting fired up to And all of those and bring together an unquestioned set of solutions for our customers as part of the overall IDM 2.0 strategy. Thank you. Next question.
Thank you. Our next question comes from the line of Dean Takahashi from VentureV. Your line is now open.
Hey, Pat. Nice to chat again. I wondered with the $20,000,000,000 going into those Two factories. Do you know what line width they're going to start with? Like, are they a feature like 5 nanometer, 3 nanometer Factory and are both of them going to be for Intel foundry services or one of them?
Is one of them going to be internal, etcetera?
Yes. Thanks, Dean, and great to talk to you. It's been a while. Good to catch up. And what we're doing with the 2 fabs in Arizona, we're not being explicit on the nodes.
But what I will say is that they're EUV capable, right, which says they're 7 nanometers and beyond capable. And you'll see that we'll get more specific As we go forward in time with those. What we've said is as well is that there'll be 4 committed capacity for So they can show up and say, hey, I want 5 ks wafer starts a week, we'll be able to say, yes, we're making that commitment to you. We do expect to be able to leverage that capacity though for existing customers as well as our emerging foundry customers. Over time, our factory network will be able to support a range of dedicated capacity, shared capacity, as well as foundry capacity.
And we see that part of our ability to meet all of the requirements globally that we'll have as well as in U. S, Europe and globally We'll be the opportunity to leverage that full factory manufacturing capacity as well as a packaging test on a global basis With the unquestioned leadership of our supply chain, our manufacturing, our process and IP, this is a pretty powerful combination. Thanks and maybe next question. Thank
you. Our next question comes from the line of Timothy Arcuri from UBS. Your line is now open.
Thanks a lot. I guess I had a question for George. George, at the Analyst Day, you were talking about gross margin this year being Roughly 57. I know we're coming in at 56.5. And of course, that includes the extra 150 to 200 basis points you get from the sale of the NAND business.
You also said that this would be the bottom in gross margin. So I know now there's a lot of more moving parts now with this foundry push as well. So I'm just wondering if you can again Reaffirm that this year will be the bottom in gross margin. Thanks, George.
Let me just start that one off a little bit. And overall, hey, these are good markets for us. And with the rising tide of semiconductors globally, leadership products Create leadership positions and margins in the industry and that's what we're about. We're investing in creating those leadership positions, expanding our capacity to do that. And overall, we think that leaning forward into a very strong semiconductor market is clearly the right strategy For the long term business investments and the financial returns that we want to bring to our investors over the long term.
And with that maybe George you can just jump a little bit more specifically into the margin question. Sure, happy to. Hi, Tim.
If we think about our revenue guide today, which kind of sets up gross margin, We're seeing an industry shortage impacting both our top line, our gross margin Based on the mix that's coming out of the shortage and also earnings per share, if we think back to 2019 when we We guided the 57% in 2021. Clearly the NAND divestiture Is a tailwind for this year, and I would say that the mix of business that we see, while demand is stronger, we're seeing more mix For small core as PC demand has increased substantially, so it's a good demand story, A little bit impacted by mix during the year. Also we've seen IoT And Mobileye come out of a challenging year, in 2020 with COVID, and they're starting to recover, which We had expected them to be a little bit stronger as they will be as that recovery continues. So I think the gross margin story It's a good story. In terms of how the gross margin will roll forward, we're going to have an Analyst Day in the second half of the year that will give us a chance to talk about the investment opportunities that we're making and what the impacts will be both on investment and margin.
Next question.
Thank you. Our next question comes from the line of Tom Krasitz from Prodigal. Your line is now open.
Hi. Thanks, Pat. My question is about the expansion of this foundry strategy, it Seems likely you're going to be competing with your customers to some extent. And that's been problematic for other companies. How do you plan to manage that?
Overall, what we're viewing is this strategy that we're laying out is one that actually gives us great opportunity to partner. In some cases, there may be some coopetition, but we see this as a great opportunity to create opportunities for Differentiated products and technologies as never before. And clearly, we're going to go to, as I mentioned, our cloud customers and say, let's Go create opportunities to more uniquely meet your business requirements because you're at such extraordinary scale. We're also going to go to some Like you saw in our announcements today, people like Qualcomm, who might have been more competitive before and we're now going to say, hey, let's Find ways to leverage our technologies in ways that weren't possible before and can we become your foundry partner. We also will pursue customers like Apple And say, boy, are we possible to build and expand on your foundry capabilities as well.
We're also seeing this as Our foundry capabilities, we're expanding the relationships that we have with TSMC, Samsung, UMC and Global Foundries and leveraging them as well. This is clearly a coopetition story and one that by managing our business judiciously, by creating more business Leveraging our world class IP portfolio, we see IDM 2.0 as a unique strategy for Intel and one that the world needs right now And we can deliver at scale a powerful accelerant to meet the growing demands for semiconductor technology on a global basis. That's something available to us and we're excited to go execute on this effectively and create many more partners and customers across the industry as a result. Next question please.
Thank you. Our next question comes from the line of Stacy Raskin from Bernstein Research, your line is now open.
Hi, guys. Thanks for taking my question. I'd like to know, would this foundry strategy be possible without the governmental incentives? And If it would be possible without them, would you still be doing it? Is it necessary, do you think, to sort of right the ship going forward in terms of where You're coming from?
Yes, great question. And let me just say, this is the Intel strategy period, full stop. It does not depend on a penny of government support or state support or any other investments to make it successful. It is the right strategy for us going forward. And as we say, the 3 legs, our internal factories meeting the majority of our needs, Leveraging the foundry network, the best technologies to deliver the best products in every category we participate and then opening our fabs to allow us to scale and Benefit from those technologies to meet a broadening set of customer demands.
That trio gives us leadership products, leadership costs, leadership supply. That is the right strategy for Intel. Of course, governments, we want incentives, we want investments because It is the right thing for them to accelerate manufacturing and this imbalance of the global supply chain. But we're making these commitments without any commitments from the governments to accelerate them, but we've gotten such positive responses. And we've seen from Secretary Raimondo, who participated in our announcement, positive comments from across different government sectors in U.
S. As well as in Europe, there's enthusiasm for what we're doing today. So we see those though as opportunities to accelerate and expand the opportunities that we've described today. We're going first. We're putting our chips on the table and we believe we're going to see extraordinarily positive responses from customers as well as governments around the world.
Next question please.
Thank you. Our next question comes from the line Stephen Nellis from Reuters News. Your line is now open. Hi, thank you. That's
I just wanted to add that, talking about these foundries or the fabs for foundries, How are you going to balance and manage external and internal demand? And how are we going to manage that when tough decisions come down? We've got a situation right now where we've got a very difficult limited supply chain. And so If you couldn't get enough substrate to meet your own demand, how are you going to make those decisions when you've also got a balanced commitment To foundry customers.
Yes, and a couple of aspects just in it. Part of it is setting this up as a separate business unit, separate P and L, Separate accountability for it and we're going to make commitments to our customers in those areas and we're going to meet our commitments just like We've made commitments to our OEM customers today and we meet those commitments and we do everything that we can to meet those commitments. Part of the announcement today of the 2 new fabs is to create more capacity. This is exactly what we're leaning into and we expect, As I've said, that we'll announce our next factory locations in the U. S.
As well as Europe within the next year, because we see this as a Strong market demand overall. So the combination of our internal and external capacity requirements allows us to build ahead, Create more capacity that we can be satisfying those collective needs of our customers and underneath that, we'll meet our commitments And we'll have a separate P and L, a separate business unit who's accountable to those customers to meet those trade offs. And obviously, We're going to work hard to always be on the front foot of the technology, of the capacity and overachieving on every Our business as we look forward. I'll say one of the themes to my young CEO tenure, Execute, execute, execute. We're bringing back the execution discipline of Intel, you know what I've called it the Grovian culture that we do what we say that we're doing.
We have that confidence in our execution, you know that our Teams are fired up. We said we're going to do X, we're going to do 1.1X every time that we make And that's the Intel culture that we are bringing back, the enthusiasm we're seeing inside of the company, the passion To execute, right, the commitment to leadership, that competitive zeal and to collectively as that emerges, we have confidence That we're going to meet not just our existing customers, we're going to be leaders in the market and we're going to satisfy the new foundry customers because the world needs more semiconductors and we're going to step into that gap in a powerful and meaningful way. Next question, please.
Thank you. Our last question is coming from the line of John Pitzer from Credit Suisse. Your line is now open.
Yes, Pat, thanks for letting me ask I'll stick on Intel Foundry Services. I'm just kind of curious, is the strategy here to be just a bleeding edge foundry? Or do you feel for economic purposes, it's important to have a full suite of products from N minus all the way to N plus Is $19,000,000,000 to $20,000,000,000 now kind of the right new zip code we should be thinking about on annual CapEx as you execute? And help me understand, There's a long lead time to investment. When might we actually see some meaningful foundry revenue through the P and L?
Wow, you put a lot That question, John. That was a candidated question. Let me try to unpack it a little bit and great to talk with you again. First, I'd say that As we think about this business, right, as we're moving into the Intel foundry services, this is going to be a long term This is commitment for us and we'll be establishing foundry capacity, we'll be building capacity for that. It will be focused on leading edge capacity, but We're already delivering 22 nanometer foundry capacity and I expect to expand that to existing customers as well.
We do expect that the foundry model means that we have longer lifecycle of our fabs, that as we move through the depreciation cycle, clearly the back end, Right, becomes a more lucrative portion of the fab cycle. And we expect to fully materialize that because customers, once they Deliver capacity on a node, they expect to stay there a while. And we expect to fully meet and satisfy and be aligned with the foundry economics. And as you well know, John, that's a good business model today for the foundry suppliers. And we expect that we're going to be similar in nature with the financials that we provide for those customers.
We're not today making longer term views of our capital outlays. We've taken up Our capital requirements to the $20,000,000,000 number this year, most of that is being driven by the overall capacity requirements, but we're also Starting to put those stakes in the ground for the foundry capabilities as well. And later in the year, as George mentioned earlier in his comments, We'll be having a longer term analyst outlook that we'll have in an Analyst Day to give you some of that clarity of where we're going into the future with our Capital requirements for the long term, but we do see that, hey, it's going to take several years for us to build this business up, but Ultimately, it's a good business that we're moving into and it heavily leverages everything that Anne is doing in R and D, Everything that we're doing across our factory, our test network and everything that we're doing in our core IP generation, this is a heavily leveraged business Against everything that we're already doing in the company. And that makes it exciting because not only does it use what we're already doing and good at, But it also helps us meet our customer requirements in a unique and powerful way as we lean into the future.
So overall, look forward to chatting with you more as we So with that, maybe as we wrap up our session today, I'd just say thanks. Thank you for joining us. Today's an exciting day. And as I hope you've gathered, Intel is back, right? This is the old Intel It's now the new intel as we look to the future.
We are excited for the things that we are laying out. In a few short weeks, We've accelerated the pace and we've laid out a powerful vision of what IBM 2.0 will mean for leadership products and for Intel We're increasing our capacity with major fab investments in Arizona. We're stepping up aggressively into our industry, our nation And our world requirements for more semiconductor capabilities. Today is the first step, but We are just getting started. And I can say with confidence, Intel's best days are in front of us.
Stay safe, healthy, and I hope to see you all soon. Thank you so much.