Intel will outsource part of its CPU production. TSMC will be producing Core i3 processors in Taiwan in the second half of the year. Next year CPUs from the middle and upper price segment will be added. This is practically a taboo breaking with the world market leader, who has always attached importance to at least always building its better CPUs itself.
But Intel is under pressure. The core business with the x86 processors is suffering from persistent manufacturing problems and product delays. Since December, a major investor has been pushing Intel to outsource its CPU production. Intel CEO Bob Swan had to resign on Wednesday, with Pat Gelsinger taking over from him. On the same day, the market research company TrendForce revealed Intel’s outsourcing plans.
First in 5 nanometers, then even 3
According to this, TSMC (Taiwan Semiconductor Manufacturing Company) will manufacture the Core i3 CPUs using the latest 5 nanometer technology. CPUs in the middle and upper price segment are expected to be added in the second half of next year. These should then even be produced using 3-nanometer technology. The smaller the structures, the more chips can be built from a silicon wafer. At the same time, smaller transistors require less power, which means that less heat has to be cooled down.
However, it is unclear how much production capacity the Taiwanese have for Intel. According to a report, Apple has grabbed TSMC’s entire 3nm capacity. TSMC produces chips for Apple’s iPhones, iPads and Mac computers. Apple is switching from Intel to ARM processors in its Macs. TSMC manufactures these chips, known as M1, in 5 nm technology. In addition, AMD uses TSMCs services for Ryzen processors and Radeon graphics chips.
Consequence of own manufacturing problems
Intel has so far had 15 to 20 percent of its chips manufactured externally, like that Market research company TrendForce reports. The Taiwanese contract manufacturers TSMC and UMC take over a large part of this chip production, but so far these are not CPUs. Most of them come from Intel’s own chip factories.
But these lag behind when it comes to manufacturing technology. It was only last year that the market leader had to postpone the introduction of chip production using the 7 nm process from mid-2022 to the end of 2022 or early 2023 at the earliest. In addition, there is Intel’s 10 nm fiasco, which still does not allow high volumes. Therefore, the company still has to fall back on 14 nm production even for the next generation of its desktop CPUs (“Rocket Lake-S”).