Intel outsources Core i3 to TSMC’s 5nm process

Intel outsources Core i3 to TSMC’s 5nm process

Business news |
By Nick Flaherty

Market analyst Trendforce reports that foundry TSMC is to start making Intel’s Core i3 process later in the year on a 5nm process. This follows Intel’s well documented problems with its leading edge process technology at 10nm and 7nm. 

The Core i3 move to a 5nm process is set to be followed by mid-range and high-end CPUs being produced for Intel by TSMC on a 3nm process in 2H22. TrendForce did not give a source for the information, simply referencing “investigations.”

Intel has long outsourced production significant amounts of its non-CPU chips to TSMC and UMC – about 15 to 20 percent of its output, according to TrendForce. This is partly because it has often acquired fabless startups that had brought products to market using foundry. It was usually not worthwhile to re-engineer such products to Intel processes. It is also because Intel has wanted to focus on leading-edge specialist processes, although with less success in recent years.

That 15 to 20 percent outsource was likely worth $10.5 billion to $14 billion in 2020, given Intel’s annual revenue of $70bn.

As a result, the world’s leading processors have been produced for Apple, Hi-Silicon and Samsung on foundry manufacturing processes at 7nm and 5nm. It also means that Advanced Micro Devices, Intel’s rival in the PC processor market, has been able to gain a superior position due to access to TSMC’s 7nm manufacturing process. Intel’s in ability to keep pace with leading foundries is also likely to have figured in Apple’s decision to develop its own PC processors for the MacBook and Mac Mini, now equipped with M1 processors manufactured for Apple by TSMC.

The 5nm outsourcing move will allow Intel to compete and also maintain some existence as a major IDM making higher margin chips and maintaining in-house production. It will also allow Intel make use of heterogeneous ‘chiplet’ production and packaging, TrendForce said.

TrendForce did not comment on whether Intel could ever come again to take a leading position in chip manufacturing or whether this change was an inevitable transition to the fab-lite production that has overtaken almost all other leading IDMs.

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