Rumor: TSMC Won’t Build New Capacity for Intel, Views Orders as Temporary

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Intel’s decision to faucet pure-play foundries like TSMC for potentially any future project has despatched shockwaves via the industry. One amongst the largest questions raised in the wake of the announcement is upright how non everlasting it in actual fact is. Intel is neatly positioning the lengthen as a realistic topic of getting its apartment in disclose, and for now, TSMC appears to be like to agree.

Primarily primarily based on DigiTimes, TSMC has no plans to expand its fab ability for Intel, viewing it as a non everlasting buyer in set up of a long-term preserve shut. While you happen to’re partial to Intel manufacturing (or would make a selection to be again), right here’s a in actual fact correct signal. While Intel isn’t one of many five largest semiconductor manufacturers any extra, all of which would be excellent of over 1,000,000 wafer starts per month, it’s soundless one of an extraordinarily powerful at an estimated 817,000 wafer starts per month. And never like TSMC, Samsung, or GlobalFoundries, Intel makes consume of its possess ability nearly completely for its possess products.

Image by IC Insights

Extra complicating the misfortune is the reality that Intel manufacturers the majority of its products on its leading-edge nodes, whereas pure-play foundry wafer starts would per chance be unfold across all of the nodes the foundry manufacturers, no longer concentrated in 1-2 processes. In rapid, the ability hole between Intel and any foundry Intel wanted to faucet to address its manufacturing is at possibility of be mountainous. TSMC is declared to currently quiz itself as Intel’s “rescuer,” no longer its long-term manufacturing companion.

Intel Can also Be Snared by the Same Trap That Once Caught AMD

Sooner than AMD and Intel settled their antitrust lawsuit, AMD become beneath a a ways more restrictive x86 license than it currently holds this day. A form of restrictions become the requirement to possess its possess fabs. AMD become no longer allowed to pay TSMC, UMC, or any different pure-play foundry to develop x86 CPUs. It had to consume its possess facilities. Intel, pointless to disclose, is beneath no such restriction, but there’s a variation of this mumble haunting the semiconductor stage nonetheless.

Intel’s foundries are explicitly optimized to diagram Intel x86 CPUs, and its CPU designs are supposed for fabrication at its possess foundries. This hand-in-glove engineering is the earnings of being an constructed-in instrument producer (IDM), and it’s one of many explanations Intel extinct to present to level to its industry-leading performance. So long as Intel is constructing and filling its possess fabs, this mannequin works neatly. Shifting alternate to a different foundry, nonetheless, creates concerns.

The reality that Intel’s fabs are so specialized draw they mostly possess rate to Intel. Every greenback that Intel invests in paying TSMC to implement a specialized product line is a greenback it isn’t investing in fixing its possess fabrication skills. Every facility that TSMC brings online for Intel to consume is a facility it’ll doubtlessly have to consume for something else as soon as Intel can return to its possess fabs.

What occurs if Intel can’t return to its possess fabs? This doesn’t in actual fact fix something in the shut to term. TSMC doesn’t possess the ability to soak up Intel’s total alternate because 1). Intel’s alternate is massive, 2). Fabs clutch 3-5 years to diagram. Although Intel wanted to dump all of its possess manufacturing this day and TSMC actively wanted to clutch over as Intel’s producer, it could well per chance clutch years to carry up fresh factories or regulate unique Intel fabs to meet TSMC’s fresh pointers.

I wrote different day that Intel had given itself a 24-36 month closing date to repair its manufacturing, but upon extra reflection, I’m no longer decided that become primarily the most upright system to summarize the difficulty. Intel can’t afford to wait 24-36 months to originate making plans to movement its manufacturing to TSMC or Samsung. Given the difficulty and complexity of such transitions, Intel would have to be making an announcement more like this:

“We intend to deploy our possess Xnm node and can transition to TSMC for Ynm foundation in 2022 / 2023.”

It appears to be like no longer likely something less would suffice. Intel’s foundry companion would desire the peace of mind of a publicly announced roadmap and would want the lead time to both diagram or allocate ability. Intel, in turn, would possess an obligation to uncover its investors and to construct plans for a fashion it could well per chance eradicate its foundry alternate. Constructing on n-nanometer at Intel and n 1 at TSMC would also tender the roadmap in set up of forcing Intel into extra delays.

Given these info, I’d regulate my possess earlier observation. The reality that Intel is soundless committing to a gradual 2022 – early 2023 timeline for its 7nm CPUs shortens the window the company has to drag the set up off on a production change. Can possess to it salvage to shift to TSMC or Samsung, it could well per chance have to make that announcement inner the next 12-18 months to preserve a ways off from the chance of even increased delays. The carry-up time on fresh fabs is long ample that Intel would nearly in actual fact have to both license a direction of node, pay TSMC without lengthen to diagram a fab, or operate its fabs in tandem with TSMC to preserve a ways off from extreme production shortages.

I soundless focus on it’s more likely that Intel deploys its possess 7nm node and moves forward with its efforts to overtake the pure-play foundries and re-build direction of leadership than that the company pulls the proceed on its possess IDM grunt. The timeline for making that decision upright could well per chance per chance be a runt shorter than I at the start implied.

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