Intel Considers Outsourcing Chip Production to Third-Party Fabs

Image: Intel

Oh, how the mighty have fallen (or, at least, is falling). We posted a story earlier today about how Intel’s 7 nm processors wouldn’t see the light of day until 2022 or 2023, and the ramifications of this hiccup appear to be snowballing at a disturbing rate. In a separate conference call with analysts (via Bloomberg), CEO Bob Swan admitted that Intel was considering outsourcing CPU production, which seems to confirm how screwed up things are at what was once the world’s top chipmaker. Obviously, this would change Intel fundamentally – the company has always benefited from chip design and in-house production.

“To the extent that we need to use somebody else’s process technology and we call those contingency plans, we will be prepared to do that,” Swan told analysts on a conference call, after the company warned of another delayed production process. “That gives us much more optionality and flexibility. So in the event there is a process slip, we can try something rather than make it all ourselves.”

“What’s different is we’re going to be pretty pragmatic about — yes if, and if and when we should be making a step inside or making it outside and making sure that we have optionality to — yeah build internally mix and match inside and outside or go outside in its entirety,” he added.

Can you imagine an Intel processor fabbed by TSMC? In the future, you might not have to! Intel’s shares have fallen as much as 18 percent since the news…

“You didn’t need to read any more,” Sanford C. Bernstein analyst Stacy Rasgon said. “Whatever little credibility they had is out of the window.”

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