Thursday, March 6th 2025
Intel Confirms Long-Term TSMC Partnership, About 30% of Wafers Outsourced to TSMC
Intel still depends on external partners for its semiconductor manufacturing strategy, with approximately 30% of its wafers currently outsourced to TSMC, according to Intel's Corporate Vice President of Investor Relations. This marks a significant shift from previous plans to eliminate external foundry dependencies, as the company now intends to maintain a permanent multi-foundry approach. "That is probably a high watermark for us," said John Pitzer during a recent investor dialogue with Morgan Stanley analyst Joe Moore. "But to the extent that I think a year ago, we were talking about trying to get that to zero as quickly as possible. That's no longer the strategy." Pitzer elaborated that Intel now views TSMC as "a great supplier" whose continued involvement "creates a good competition between them and Intel Foundry." The company is reportedly evaluating the optimal long-term outsourcing ratio, considering targets between 15-20% of total wafer production.
This strategic adjustment comes amid leadership changes at Intel, with interim CEOs Dave Zinsner and Michelle Johnston Holthaus granted increased decision-making authority while maintaining the core dual approach of developing "a world-class fabless company and a world-class foundry." The executive team focuses on strengthening Intel's product competitiveness before fully optimizing its foundry operations. This pragmatic approach is viewed as recognizing manufacturing realities in the highly complex semiconductor creation. Intel's willingness to leverage TSMC's advanced process technologies reflects both practical necessity and strategic flexibility as the company navigates its manufacturing transformation. Intel's fabrication self-sufficiency goals remain essential but will be balanced against product competitiveness and time-to-market considerations.
Sources:
Morgan Stanley TMT Conference, Transcript, via SemiWiki
This strategic adjustment comes amid leadership changes at Intel, with interim CEOs Dave Zinsner and Michelle Johnston Holthaus granted increased decision-making authority while maintaining the core dual approach of developing "a world-class fabless company and a world-class foundry." The executive team focuses on strengthening Intel's product competitiveness before fully optimizing its foundry operations. This pragmatic approach is viewed as recognizing manufacturing realities in the highly complex semiconductor creation. Intel's willingness to leverage TSMC's advanced process technologies reflects both practical necessity and strategic flexibility as the company navigates its manufacturing transformation. Intel's fabrication self-sufficiency goals remain essential but will be balanced against product competitiveness and time-to-market considerations.
12 Comments on Intel Confirms Long-Term TSMC Partnership, About 30% of Wafers Outsourced to TSMC
At this point there is absolutely no reason whatsoever for Intel to maintain both chip design and foundries under one company. They are hardly saving any money on owning their own fabs now that they are outsourcing so much and the conflict of interest making their own chips while asking to make their competitor's chips is an anvil around their necks. At this point, it's just ego, short-sightedness and lacking the willingness to change all the way. This whole process is so frustrating that I have ZERO confidence in Intel being of any value to our society. Broken promises, flowery press releases and PowerPoint slides are their only contributions now.
But there's tens of billions invested in there, simply walking away and using TSMC is a bad move long term. Intel's huge profits and market dominance came in no small part thanks to those fabs.
www.tomshardware.com/tech-industry/fire-the-intel-board-and-rehire-pat-gelsinger-argues-former-intel-ceo-craig-barrett
TSMC has way more to gain from Intel foundry services going under than it does from any sort of buyout.
Cellphones have, of course, more recently taken a big chunk of the market in terms of day-to-day consumer activities - And created the contract manufacturers (foundries) in the process. And AMD, using the same contract manufacturers, is cutting into what remains of the PC. Which is now mostly business and server use.
and wow both co-ceos aren't engineers either... holthouse is a marketing person and zizner is a finance person.
but intel keeps blowing and hemorging money!
Enthusiasts mostly don’t seem to care as much about price to performance as much as it is brought up when buying recommendations are being made (In the end, the shinier thing often wins or small performance differences are seen with big importance.), which is sad; since, if people weren’t falling for halo bait, even a player with somewhat worse wares could have a bigger chance at good volume, which would enable Intel to consider forgoing tech leadership for their fabs. They can’t now, which puts them in a pinch with TSMC’s higher R&D bugdet, true.
I haven’t heard any credible claims that Intel’s 18A is not actually going to be good, I would not count on them dodging it for PTL yet. They really need to fab inhouse, else they’ll lose on profits. (And, possibly on volume, having to compete with everyone else for TSMC capacity.)
For fabbing competitor’s products, there’s NDAs and lawsuits, so I wonder if anyone has word that fear of IP theft is actually what is keeping IFS from gaining traction. Besides there being lots of non-really-competing companies that want chips made. Look at this article from a week ago! Small steps but big names:
www.techpowerup.com/333519/nvidia-and-broadcom-testing-intel-18a-node-for-chip-productionThey still have their server stuff on IFS, try not to be wrong, please.