What They Say
EE Times reports, quoting Trendforce as a source, that Intel has moved the production of 15% to 20% of its non-CPU chips to TSMC and UMC. While the company is planning to kick off mass production of Core i3 CPUs at TSMC’s 5nm node in 2H21, Intel’s mid-range and high-end CPUs are projected to enter mass production using TSMC’s 3nm node in 2H22.
What We Think
I know this is not a display story, but displays have to have something to move their pixels! I can’t let this kind of inflection point go unmarked. Intel has done an amazing job of dominating CPUs and the chip business for almost all my time in the business (although I started off with Motorola 6502 CPUs!). Its vertical integration of chip design and fabrication has meant real dominance. However, it looks now as though this move will allow the company to focus its higher margin chips on its own fabs. That seems a sensible strategy for the shorter term profits.
However, the chip business is absolutely about scale and cost advantages that are self-reinforcing (to a degree that the LCD business has not been). If the company can catch up in terms of process technology during a period of less competitive advantage, it may be able to recover its mojo. However, TSMC et al are not going to stop and Intel could get squeezed into a new position, with less dominance.
It has been apparent, even as a non-specialist in the semiconductor market that many of the notebooks at CES this year were powered by AMD chips (made by TSMC). Apple, of course, is heading off with its own M1 chips (made by TSMC). The chip world may well look very different in a few short years!
Intel has turned to Pat Gelsinger, a 30 year Intel veteran who has been CEO of VMware since 2012. (BR)
