Intel no longer wants to be dependent on TSMC for the manufacturing of its flagship processors. In any case, this is the promise made to financial analysts by Pat Gelsinger, its general manager, on the sidelines of the presentation of the financial results. A change which should allow the Santa Clara group to boost its margins.
Historically, Intel relied on a vertical integration model, manufacturing chips it designed itself with its own architecture. In 2021, barely named, Pat Gelsinger announced a major change in strategy, agreeing to subcontract part of the production to TSMC.
Repatriation of production
This strategic turnaround was explained by the significant technological delays taken by the company in the finest engravings. It therefore aimed to make its processors more competitive on the market. The latest Lunar Lake and Arrow Lake models are produced by the Taiwanese founder.
Intel now hopes to reverse the trend with its next generations of CPUs: Panther Lake, whose commercial launch is expected next year, then Nova Lake, which will succeed it one or two years later. “We are fully implementing the wafer production repatriation strategy that we have already outlined,” explains Pat Gelsinger.
For Panther Laker, some components will still be manufactured by TSMC. But “more than 70% of the silicon surface will once again be produced in-house”explains the boss of Intel. For Nova Lake, whose roadmap can still evolve, the proportion will be even greater. Pat Gelsinger explains that the use of subcontracting will vary depending on the model.
New engraving process
To repatriate this production, Intel is counting on a new engraving process, called 18A, which should allow it to compete with TSMC on the most advanced components. To put the odds on its side, the company recently decided not to launch its 20A process, which was initially supposed to produce Lunar Lake CPUs.
Intel also hopes that its technological advances will allow it to boost its new foundry activity, at the heart of Pat Gelsinger’s relaunch project. But it is struggling to take off and is accumulating heavy losses. In mid-September, Intel announced that the division would become independent. And that it could raise money from external investors to finance its development.
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