Intel Considers $15B Chiplet Production Outsourcing to TSMC in 2024-2025

Intel is reportedly partnering with Taiwan Semiconductor Manufacturing Company (TSMC) to outsource chiplet production for its upcoming 14th Gen Meteor Lake family and beyond, as part of its IDM 2.0 approach to make its internal foundry more open to third-party customers and rely more on external foundries.

Intel's decision to outsource chiplet production to TSMC aligns with the company's strategy to leverage external foundries and meet the growing demand for advanced semiconductor technology.
Intel can tap into TSMC's expertise and benefit from their cutting-edge manufacturing processes.
Intel's move to outsource chiplet production to TSMC signifies a strategic shift that could potentially reshape the landscape of the chipmaking industry in the years to come.

Intel, one of the leading chipmakers in the world, is reportedly considering outsourcing chiplet production to Taiwan Semiconductor Manufacturing Company (TSMC) in 2024-2025. This move comes as part of Intel’s IDM 2.0 approach, which aims to make the company’s internal Foundry more open to third-party customers and rely more on external foundries to meet deadlines.

The upcoming 14th Gen Meteor Lake family will be the first to demonstrate this shift. While the CPU compute die will be fabricated on Intel’s 4/4nm process, the iGPU and SoC tiles will be manufactured on TSMC’s 4nm and 6nm nodes, respectively. This collaboration between Intel and TSMC is expected to significantly increase Intel’s foundry orders to TSMC in the coming years.

According to a report from Goldman Sachs, TSMC’s foundry services to Intel may increase to $5.6 billion and $9.7 billion in 2024 and 2025, respectively. This surge in orders can be attributed to Intel’s adoption of a chiplet or tiled design approach. Starting from the 14th Gen Meteor Lake lineup, every chip Intel sells will include a leading-edge TSMC chiplet powering the integrated GPU (iGPU). This trend will continue with the 15th Gen Arrow Lake in late 2024 and the 16th Gen Lunar Lake in 2025.

Interestingly, Intel’s dedicated graphics division is also heavily reliant on TSMC. The upcoming 1st Gen Arc Alchemist GPUs will leverage TSMC’s N6 node across all SKUs and platforms. Furthermore, the 2nd Gen Battlemage and 3rd Gen Celestial lineups are rumored to be based on TSMC’s 4nm and 3nm nodes, respectively. These GPUs are expected to be produced on a much larger scale, catering to both budget and enthusiast markets. With this move, Intel aims to rival or even surpass AMD in the highly competitive PC market.

While Intel’s decision to outsource chiplet production to TSMC may raise eyebrows, it aligns with the company’s strategy to leverage external foundries and meet the growing demand for advanced semiconductor technology. By collaborating with TSMC, Intel can tap into their expertise and benefit from their cutting-edge manufacturing processes.

As the semiconductor industry continues to evolve, partnerships like these highlight the importance of collaboration and flexibility in meeting the demands of an increasingly interconnected world. Intel’s move to outsource chiplet production to TSMC signifies a strategic shift that could potentially reshape the landscape of the chipmaking industry in the years to come.

Source: ChinaTimes

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Background Information

About AMD: AMD, a large player in the semiconductor industry is known for its powerful processors and graphic solutions, AMD has consistently pushed the boundaries of performance, efficiency, and user experience. With a customer-centric approach, the company has cultivated a reputation for delivering high-performance solutions that cater to the needs of gamers, professionals, and general users. AMD's Ryzen series of processors have redefined the landscape of desktop and laptop computing, offering impressive multi-core performance and competitive pricing that has challenged the dominance of its competitors. Complementing its processor prowess, AMD's Radeon graphics cards have also earned accolades for their efficiency and exceptional graphical capabilities, making them a favored choice among gamers and content creators. The company's commitment to innovation and cutting-edge technology continues to shape the client computing landscape, providing users with powerful tools to fuel their digital endeavors.

About Intel: Intel Corporation, a global technology leader, is renowned for its semiconductor innovations that power computing and communication devices worldwide. As a pioneer in microprocessor technology, Intel has left an indelible mark on the evolution of computing with its processors that drive everything from PCs to data centers and beyond. With a history of groundbreaking advancements, Intel's relentless pursuit of innovation continues to shape the digital landscape, offering solutions that empower businesses and individuals to achieve new levels of productivity and connectivity.

About TSMC: TSMC, or Taiwan Semiconductor Manufacturing Company, is a semiconductor foundry based in Taiwan. Established in 1987, TSMC is a prominent player in the global semiconductor industry, specializing in the manufacturing of semiconductor wafers for a wide range of clients, including technology companies and chip designers. The company is known for its cutting-edge semiconductor fabrication processes and plays a critical role in advancing semiconductor technology worldwide.

Technology Explained

CPU: The Central Processing Unit (CPU) is the brain of a computer, responsible for executing instructions and performing calculations. It is the most important component of a computer system, as it is responsible for controlling all other components. CPUs are used in a wide range of applications, from desktop computers to mobile devices, gaming consoles, and even supercomputers. CPUs are used to process data, execute instructions, and control the flow of information within a computer system. They are also used to control the input and output of data, as well as to store and retrieve data from memory. CPUs are essential for the functioning of any computer system, and their applications in the computer industry are vast.

Foundry: A foundry is a dedicated manufacturing facility focused on producing semiconductor components like integrated circuits (ICs) for external clients. These foundries are pivotal in the semiconductor industry, providing diverse manufacturing processes and technologies to create chips based on designs from fabless semiconductor firms or other customers. This setup empowers companies to concentrate on innovative design without needing substantial investments in manufacturing infrastructure. Some well-known foundries include TSMC (Taiwan Semiconductor Manufacturing Company), Samsung Foundry, GlobalFoundries, and UMC (United Microelectronics Corporation).

GPU: GPU stands for Graphics Processing Unit and is a specialized type of processor designed to handle graphics-intensive tasks. It is used in the computer industry to render images, videos, and 3D graphics. GPUs are used in gaming consoles, PCs, and mobile devices to provide a smooth and immersive gaming experience. They are also used in the medical field to create 3D models of organs and tissues, and in the automotive industry to create virtual prototypes of cars. GPUs are also used in the field of artificial intelligence to process large amounts of data and create complex models. GPUs are becoming increasingly important in the computer industry as they are able to process large amounts of data quickly and efficiently.

IDM 2.0: Intel IDM 2.0 is Intel's integrated device manufacturing (IDM) strategy introduced at 2021. It is a major evolution of the company's traditional IDM model, which has been in place since its founding in 1968. Under the IDM 2.0 strategy, Intel will continue to design and manufacture its own chips, but it will also become a major provider of foundry services to other companies. This will allow Intel to tap into the growing demand for semiconductor manufacturing capacity, while also generating new revenue streams.

iGPU: An integrated Graphics Processing Unit (iGPU) is a component built into a computer's central processing unit (CPU) or system-on-chip (SoC) that handles graphical tasks. Unlike dedicated graphics cards, which are separate components, an iGPU shares system resources with the CPU, allowing for basic graphics capabilities without the need for an additional card. While typically less powerful than dedicated GPUs, iGPUs are energy-efficient and well-suited for everyday computing tasks

SoC: A System-on-Chip (SoC) is a highly integrated semiconductor device that encapsulates various electronic components, including processors, memory, input/output interfaces, and often specialized hardware components, all on a single chip. SoCs are designed to provide a complete computing system or subsystem within a single chip package, offering enhanced performance, power efficiency, and compactness. They are commonly used in a wide range of devices, from smartphones and tablets to embedded systems and IoT devices, streamlining hardware complexity and facilitating efficient integration of multiple functions onto a single chip.