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TSMC’s 20nm follies could be making a market for Intel

Intel CEO Brian Krzanich wants to open up Intel’s foundries to third party clients, and TSMC’s troubles with 20nm Maxwell might be making a market for him.


Out of the roughly 25 major companies in the semiconductor fabrication business, Intel is one of biggest single owners of foundries. Except Intel isn’t in the business of competing with most of the owners of other semiconductor foundry plants. Intel designs its own semiconductors and manufactures them itself, and does not rent out excess time on its foundries to other industry players — a model that Samsung and Texas Instruments use to generate revenue from idle lines.

This all changed in November when CEO Brian Krzanich announced during Intel’s annual investor day that the company plans to rent out space on its foundry lines that had extra capacity due to the continued weak demand for desktop processors.

Considering the news over the past few weeks from Taiwan Semiconductor Manufacturing Company, Intel might be a welcome addition to the foundry market. Nvidia’s frustrations with TSMC have been well publicized, but you can also add AMD to the list of likely frustrated customers. During AMD’s earnings call last week, senior vice-president Lisa Su said that AMD will remain at 28nm for the rest of the year before moving to 20nm next year and FinFET after that. Su didn’t offer any further explanation on the issue.

While TSMC struggles with ramping up its production lines to meet 20nm demand from AMD and Nvidia, Intel has proven to be quite comfortable at 22nm and is planning a push into the sub-20nm space with Braswell using the 14nm process node. In contrast, TSMC’s highest profile competitor in the foundry space, GlobalFoundries, is pushing into the 14nm space on paper — lest we forget its botched 16nm node — with the help of Samsung but there are numerous reasons to be skeptical of its claims.

As secrecy is paramount to the foundry business, Intel is mum on any further details of its foundry plans or any potential clients it may have signed up. An Intel PR representative pointed to Kraznich’s statements in November for guidance on where Intel is going with its foundry ambitions, but offered no new information.

It would be interesting to see how many big clients Intel could sign up for its foundry services. Considering the precedent Samsung has set by manufacturing the SoC and other various parts of Apple’s iPhone, the “conflict of interest” of Intel fabricating silicon for competitor AMD might not stop AMD from signing up as a client of Intel’s. In all likelihood it’s just one yield crisis away from possibly happening — but that’s just conjecture.

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