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TSMC-Fab

Final week, we reported on Intel'south manufacturing constraints and the difficulties the company faces in ramping up additional 14nm production. Today, a new study claims that the CPU giant volition outsource some of its chipset production to TSMC to ease its own capacity woes on 14nm. That'due south the word from DigiTimes, which quotes the usual "industry sources" to say that Intel'south overall 14nm bit supply has fallen curt past as much as fifty pct — but simultaneously claims that Intel only intends to outsource the product of its H310 and other entry-level chipsets to TSMC. Sources also claim that Intel's 14nm procedure could fall short of demand by equally much as l per centum.

This doesn't make a lot of sense. Information technology'due south 1 thing to say that Intel's 10nm delay could be causing it some headaches and expansion problems — that'due south probably truthful — but if demand for the company'southward parts was running 2x higher than supply, we'd expect to see much college prices than the relatively modest increases that have hitting the market to date. It would also most likely require Intel to shift far more manufacturing adequacy to TSMC than merely offloading some chipset work.

Intel'south chipsets, while disquisitional to the operation of its various platforms, are likewise much smaller than its CPUs, especially its larger server cores. The fact that more capabilities are now integrated on-dice at the CPU level than was once true should also reduce the overall size of these chips, and therefore make information technology easier to produce the necessary amounts with a relatively low amount of foundry chapters relative to the lines required to back up high-terminate Xeon processors. Our approximate is that the 50 percent shortfall, even if accurate, refers to need for a specific chipset or product rather than Intel's overall 14nm chapters.

SoFIA integrated Atom SoC, details

The SoFIA partnership with TSMC raised eyebrows, but not acquirement

While unusual, this would not be the first time Intel has tapped TSMC for additional manufacturing capabilities. Intel'south 28nm modems are congenital past TSMC and that foundry handled some of the company's SoFIA chips and manufacturing for the related Rockchip deal (some of the SoFIA tablet and smartphone processors never went into product, just the Rockchip processors supposedly did). Intel is facing a short-term capacity crunch because the delay to its 10nm rollout has left information technology with chapters defended to that node that isn't yet online at a time when demand for x86 products in data centers is quite robust. Intel has previously said that it expects to recognize an boosted $5B in revenue in 2022 that information technology didn't predict back in January due to this increased demand. It's entirely possible, therefore, that this bargain represents a profit maximization strategy for the company. Information technology may be cheaper to push some chipset manufacturing off to a 3rd party and proceed more of its own foundry infinite crunching on high-margin Xeon parts than to shift existing 14nm over to building chipsets while simultaneously trying to bring 10nm online.

The overall touch on to Intel's business from this shift should exist minor, especially if TSMC has 14nm chapters information technology's looking to sell. Higher prices on Intel chipsets and overall higher prices from increased demand could represent a pickup opportunity for AMD, simply Intel will presumably be looking to manage its own inventory levels to prioritize parts for its nigh lucrative markets. If that rumor most a 50 percent demand shortfall actually does utilise to Intel's entire product line we'd await price increases to go on and hardware to eventually become difficult to find, which would open up a commensurately greater opportunity for the company's rivals, potentially including Qualcomm. But and so far, the merely products being moved are chipsets, which cuts against this being as large a problem as that blurb makes information technology sound.

Now Read: Intel Faces 14nm Shortage as CPU Prices Rise, Upcoming Core i7-9700K Clocked to v.3GHz on Air, and Charting Nine Years of GPU Market Share Between AMD, Intel, and Nvidia