Intel Could Announce Decision to Outsource Chip Manufacturing to TSMC in January

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Image: Intel

It’s no secret that Intel has fallen far behind in process technology, but the chip giant may be able to claw its way back to glory by employing the services of the world’s premier semiconductor manufacturing giant, TSMC, which has been responsible for churning out its rival AMD’s cutting-edge, 7-nm Ryzen processors.

Echoing comments made to investment analysts by CEO Bob Swan last month, Oregon Live is reporting that Intel is expected to announce a decision on whether it’ll strike a deal with TSMC in January.

While there’s the issue of capacity (the Taiwanese giant is already neck-deep in orders from the likes of AMD and Apple), it wouldn’t be surprising if Intel did swallow its pride and prepare for outsourcing. The company did tease over the summer that it was willing to put its future chip portfolio in the hands of a third-party fab.

“We will continue to invest in our future process technology roadmap, but we will be pragmatic and objective in deploying the process technology that delivers the most predictability and performance for our customers, whether that be our process, external foundry process or a combination of both,” Swan wrote in a prepared statement for investors in July.

The transition could spell a bit of trouble for Oregon, which is home to many of Intel’s research labs and semiconductor fabrication plants. Despite Swan’s claims to the contrary (Oregon Live reports that Intel is “committed to maintaining its advanced research and retaining internal production capacity”), industry analysts are warning that it’s going to be the end for Intel’s internal factories if it does entrust TSMC for manufacturing.

“No one’s been able to make it work that way,” said one analyst in response to Swan’s claims that a hybrid (i.e., first party and third party) process can work. “That’s like having two spouses,” he continued, noting that “it’s too expensive to maintain internal factories while outsourcing the most valuable technology.”

“Once they start going down this path it’s almost impossible to go back because it creates its own momentum.”

Tsing Mui
News poster at The FPS Review.

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