Report: Fab-lite Intel outsourcing starts with Core i3

January 18, 2021 // By Peter Clarke
Report: Fab-lite Intel starts by outsourcing Core i3
Intel is to begin outsourcing the manufacturing of its leading-edge processors with the Core i3 on TSMC's 5nm process in 2H21, according to TrendForce.

The market analyst said that this would be followed by mid-range and high-end CPUs being produced for Intel by foundry TSMC on a 3nm process in 2H22. TrendForce did not give a source for the information, simply referencing "investigations."

Intel has long outsourced production significant amounts of its non-CPU chips to TSMC and UMC – about 15 to 20 percent of its output, according to TrendForce. This is partly because it has often acquired fabless startups that had brought products to market using foundry. It was usually not worthwhile to re-engineer such products to Intel processes. It is also because Intel has wanted to focus on leading-edge specialist processes, although with less success in recent years.

That 15 to 20 percent outsource was likely worth $10.5 billion to $14 billion in 2020, given Intel's annual revenue of $70 billion.

However, Intel has had problems introducing its 10nm and 7nm manufacturing processes (see Intel goes foundry for 7nm due to yield issues and Intel apologies for another supply shortfall ).

As a result, the world's leading processors have been produced for Apple, Hi-Silicon and Samsung on foundry manufacturing processes. It also means that Advanced Micro Devices, Intel's rival in the PC processor market, has been able to gain a superior position due to access to TSMC's 7nm manufacturing process. Intel's in ability to keep pace with leading foundries is also likely to have figured in Apple's decision to develop its own PC processors for the MacBook and Mac Mini, now equipped with M1 processors manufactured for Apple by TSMC.

The outsourcing move will allow Intel to compete and also maintain some existence as a major IDM making higher margin chips and maintaining in-house production. It will also allow Intel make use of heterogeneous 'chiplet' production and packaging, TrendForce said.

TrendForce did not comment on whether Intel could ever come again to take a leading position in chip manufacturing or whether this

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