Intel has agreed to manufacture processors with TSMC, it will have a full 3nm factory just for itself

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Intel reportedly managed to gain preferential access to the 3nm TSMC process. One whole “gigafab” is to be reserved only for its products. The advantage it will gain over competitors can be significant.

We have been reporting for some time that although he has Intel a long-term plan to regain leadership in production processes, meanwhile, due to its current delay, will use TSMC processes – for the GPU, but probably also with 3nm processors. This is probably definitive, and what’s more: Intel has now gained the position of preferred customer with a preferential approach that will have a single factory dedicated to it, so it could have similar benefits as Apple.

Of course, the fact that Intel is also a competitor for TSMC (which could take away part of its custom market in the future) and that it is uncertain whether it will last it as a customer in the long run obviously makes a similar relationship potentially problematic for TSMC. The ideal future for TSMC would be if Intel’s ambitions failed and the company became dependent on TSMC. Recently, there have been rumors of a hard deal between the two giants, with Intel wanting preferential access and benefits, but the TSMC made them relatively strong or prepaid. However, the negotiations were secret, so it is quite possible that there were often speculations in which the observers projected their various ideas.

But it seems that both companies have agreed. The Taiwanese website DigiTimes, closely linked to various sources from the local semiconductor industry, now writes that TSMC will completely reserve one of the factories preparing for the 3nm process for Intel. It shouldn’t be the only TSMC line capable of 3nm production, so it’s not that Intel has bought exclusivity on the 3nm process and eliminated competitors from it.

But a significant part of the total production should probably be set aside for Intel, because the “giga” lines of the TSMC have a very high capacity and therefore not much of them for one particular technology. Intel is said to have one of them reserved for its needs on the basis of now concluded contracts. We don’t know if this means that TSMC can never place chip production for someone else in it, even if it’s just unused, or that exclusivity takes the form that Intel always gets full capacity if it needs it, but unused capacity could be opportunistic. use for other clients.

Will Intel have an edge over the competition in 3nm chips?

In any case, this could give Intel a significant advantage if there is a shortage of capacity on this best technology in the first critical years of 3nm chips on the market. While Nvidia, Qualcomm or AMD, for example, will compete for a limited package of freely available wafers, Intel will always have a significant amount of capacity for sure.

An even bigger advantage over the competition would be if this exclusive relationship with TSMC allowed Intel to release 3nm chips before competitors had them, and thus gain a big advantage in performance and energy efficiency for half a year or a year. How powerful it can be was seen, for example, when AMD released Ryzen 3000 a 5000 Ryzenes on a 7nm process versus Intel’s 14nm processes and almost rolled them in energy efficiency.

A factory in Hsinchu, northern Taiwan, should be reserved for Intel (found in English as Hsinchu). This is not a newly built line, a project was announced in 2017, construction began in 2019, and production should start this year in the second half of the year – so Intel will have one of the factories built in advance. Earlier reports said that it should have a capacity of up to 55,000 300mm wafers per month, so this is a really large-capacity factory.

This preferred position of Intel will probably cost something. However, we will probably not know how much money he had to commit or pay in advance. But the benefit to Intel could easily be greater than anything the contract cost if it could increase margins and market share against AMD processors (and possibly gain a foothold in the GPU market against AMD and Nvidia).

Resources: techPowerUp, DigiTimes