Intel plans to strengthen its hand in the competition by working with TSMC for processor manufacturing.
Intel made several major announcements about 7 nm technology at Intel Unleashed: Engineering the Future. The company announced that by 2023 they expect to still produce most of its products in-house using its own manufacturing technology. On the other hand, the company states that it will receive support from third-party manufacturer TSMC for its processors in 2023 and these processors will come to both customer and data center markets.
According to Tom’s Hardware, this development came just after Intel announced last year that the 7 nm process was delayed. The company was forced to do the unthinkable about this development: for the first time in its history to outsource the production of CPUs and GPUs.
These new announcements mean that Intel will launch 7 nm Meteor Lake desktop chips and Granite Rapids data center processors, which will be produced with its own processing technology in 2023, as well as other CPU series that will use these processor cores in 2023. Using TSMC’s third-party processing technology, chips are thought to strengthen Intel’s offering for both customer and data center markets.
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It also seems quite logical for Intel to get support from an outside source. It is shared that Intel produces more x86 processors than all companies. This means that a single external facility cannot meet production requirements. Note that Intel has more than twice the semiconductor revenue of TSMC. Considering the limited capacity of TSMC, it is underlined that Intel will not have enough output to cover the entire serious sales volume.
The possibility of Intel using packaging technology to reduce the number of externally sourced components required to create a complete chip is also welcome. The company will also be able to replace the 7nm CPUs on the Meteor Lake and Granite Rapids chips, based on TSMC’s smaller compute node, with a simple process to create more competitive models. In addition, we can see completely different models based on third-party transaction technology.
As top-tier products typically include the smallest amount of overall sales, outsourcing high-end CPUs will allow Intel to meet larger throughput requirements with its own 7nm technology and also compete with lower-volume leading products.
Intel; TSMC has a long history of producing simple low-value chips at various facilities such as Samsung, GlobalFoundries and UMC. It also traditionally used third-party factories to produce about 20 percent of its production for low-margin, non-CPU products such as chipsets and Wi-Fi chips built on end-end nodes. We do not yet know how far the company plans to expand production to third parties.