Intel has moved to reshape the global artificial intelligence (AI) chip supply chain by abruptly recruiting Lee Seok-hee, former CEO of SK hynix (000660.KS), as executive vice president overseeing its foundry (chip contract manufacturing) division. Industry observers say the appointment could allow Intel to emerge as a new partner in the high-bandwidth memory (HBM) supply chain currently centered on Taiwan's TSMC and SK hynix. Analysts also suggest the move will act as a new variable for Samsung Electronics' (005930.KS) foundry division, which has benefited from a spillover effect caused by capacity shortages in advanced foundry processes.
Intel announced Wednesday that it had appointed Lee Seok-hee, former CEO of SK hynix and SK On, as executive vice president (EVP) in charge of advanced packaging and back-end process technology development and manufacturing in its foundry division. The return of Lee, who previously worked at Intel for more than 10 years, clearly signals Intel Foundry's intent to strengthen its back-end capabilities and seize leadership in the next-generation AI computing infrastructure market. He is expected to take on the critical task of establishing a mass-production system for Intel's proprietary back-end technology, which had struggled to secure yields.
Intel is counting on Lee's 30 years of experience in the semiconductor industry and his production management expertise. Lee holds a doctorate in materials engineering from Stanford University. He worked at Hyundai Electronics' semiconductor technology research institute before spending 10 years at Intel, where he was a process improvement specialist who won the "Intel Achievement Award (IAA)," given to top engineers, three times. He later served as an associate professor at KAIST before joining SK hynix, where he held positions including head of the future technology research institute, head of the DRAM development division, chief operating officer (COO), and CEO, leading the company's transition to finer processes and DRAM product development.
Having most recently been credited as SK On CEO with stabilizing the manufacturing processes and yields of large battery plants, his production management know-how is expected to play a significant role in resolving the advanced packaging yield problems Intel faces.
Above all, the industry is focusing on the possibility that the appointment will expand cooperation between Intel and SK hynix. In particular, observers expect Intel Foundry to leverage its advanced 18A (angstrom, one ten-billionth of a meter) process to pursue orders for the "base (logic) die" of SK hynix's next-generation HBM. The base die of HBM4E (seventh generation), for which SK hynix shipped samples this month, is being produced using TSMC's 3-nanometer process. Intel's 18A, which offers comparable performance, is also assessed as capable of mass-producing HBM4E base dies.
For SK hynix, the current structure of relying on a single foundry partner in TSMC could pose a risk to supply chain stability. If TSMC's plants are exposed to geopolitical crises or a shortage arises due to capacity constraints, the HBM production system could grind to a halt. In this situation, analysts say the presence of Lee, who led SK hynix's HBM development, could serve as a link for cooperation between the two companies.
The industry believes that if SK hynix secures Intel Foundry as a second vendor to diversify its supply chain, Intel could also secure foundry revenue, aligning the interests of both companies.
Meanwhile, Lee's move to Intel is expected to act as a significant variable for the expansion of Samsung Foundry's orders. Samsung Foundry has benefited by emerging as an alternative for global big tech firms struggling to secure volume amid saturated capacity in TSMC's advanced processes such as 3-nanometer. In fact, the shortage of 3-nanometer wafer supply is estimated to reach 600,000 sheets this year.
However, the situation is changing as Intel Foundry accelerates the expansion of its production facilities in the United States. Intel is actively working to secure big tech customers based on the U.S. government's semiconductor promotion policies and subsidy support. In particular, if advanced packaging yields improve following Lee's arrival, there is also a possibility that Samsung Foundry's potential customers could shift to Intel.
"Intel's advanced packaging is 30 to 40 percent cheaper than TSMC's, giving it a clear advantage," an industry official said. "Combined with Intel's advantage of domestic production in the United States, it could absorb a significant portion of the custom AI accelerator orders from North American big tech that Samsung Foundry has been targeting."
