Intel Talks With TSMC, Samsung To Outsource Some Chip Production

Intel has talked with TSMC and Samsung about the Asian companies making some of its best chips, but the Silicon Valley pioneer is still holding out hope for last-minute improvements in its own production capabilities. Bloomberg reports: After successive delays in its chip fabrication processes, Santa Clara, California-based Intel has yet to make a final decision less than two weeks ahead of a scheduled announcement of its plans, according to people familiar with the deliberations. Any components that Intel might source from Taiwan wouldn't come to market until 2023 at the earliest and would be based on established manufacturing processes already in use by other TSMC customers, said the people, asking not to be identified because the plans are private.

Talks with Samsung, whose foundry capabilities trail TSMC's, are at a more preliminary stage, the people said. An Intel spokesperson referred to previous comments by Bob Swan, the company's chief executive officer. Swan has promised investors he'll set out his plans for outsourcing and get Intel's production technology back on track when the company reports earnings Jan. 21. TSMC, the largest maker of semiconductors for other companies, is preparing to offer Intel chips manufactured using a 4-nanometer process, with initial testing using an older 5-nanometer process, according to the people. The company has said it will make test production of 4-nanometer chips available in the fourth quarter of 2021 and volume shipments the following year. The Taiwanese company expects to have a new facility in Baoshan operational by the end of this year, which can be converted to production for Intel if required, one of the people said. TSMC executives previously said the new Baoshan unit would house a research center with 8,000 engineers.

While Intel has outsourced production of lower-end chips before, it has kept the manufacturing of its best semiconductors in-house, considering it a competitive strength. Its engineers have historically tailored their designs to the company's manufacturing processes, making a shift to outsourcing of flagship products unthinkable in the past. As the provider of 80% of personal computer and server processors globally, Intel produces hundreds of millions of chips each year. That scale dictates that any potential supplier must create new capacity to accommodate Intel.

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