Intel Confirms Long-Term TSMC Partnership, About 30% of Wafers Outsourced to TSMC

[AleksandarK]

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.



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[Daven]

"a world-class fabless company and a world-class foundry."

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.

 

[RimbowFish]

there is no intel foundry anymore, they already moved all the volume to TSMC

 

[TristanX]

So they will rely on TSMC support, before clearing mess and eliminate lags with their fabs. But if fabs won't improve, then they become fabless company.

 

[TheinsanegamerN]

"a world-class fabless company and a world-class foundry."

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.

Well, there is a reason. TSMC has a near monopoly and their prices reflect that. Having internal fabs is a huge boon, when they work properly. But shufting strategy takes multiple years and it's clear intel is gonna need some serious management shakeup sat this point.

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.

 

[Daven]

Well, there is a reason. TSMC has a near monopoly and their prices reflect that. Having internal fabs is a huge boon, when they work properly. But shufting strategy takes multiple years and it's clear intel is gonna need some serious management shakeup sat this point.

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.

Absolutely no one wants or implies shuttering Intel fabs. I have always suggested IFS becomes its own company. If it doesn’t, it’s almost the same as shuttering them given Intel executive incompetence. The rot goes deep:

'Fire the Intel board and rehire Pat Gelsinger,' argues former Intel CEO Craig Barrett

Barrett had some harsh words for Intel's board of directors.

www.tomshardware.com

 

[kondamin]

So panther lake will be TSMC again....

 

[ScaLibBDP]

As soon as TSMC stands firm on US soil, it could consider buying Intel. I mean chip making business. I don't think TSMC is interested in Intel's software

 

[GodisanAtheist]

As soon as TSMC stands firm on US soil, it could consider buying Intel. I mean chip making business. I don't think TSMC is interested in Intel's software

- That'll happen as soon as the US stands firm with it's traditional allies. I have little doubt of that happening any time soon, and so I have little doubt that TSMC isn't interested in losing Taiwan it's big red button in the event of an invasion from China.

TSMC has way more to gain from Intel foundry services going under than it does from any sort of buyout.