Intel has been falling short by as much as 50 percent of demand the Digitimes report said, but whether that is due to a lack of 10nm production displacing demand to 14nm, or generally high demand, or poor yield is hard to determine.
The latest report is a corollary to the report that Intel's manufacturing woes could impact production of personal computers in 2018 (see Report: Intel production shortfall could limit PC market ). It is also significant that Intel is now not expecting to manufacture ICs in 10nm until 4Q19, some three years after the original launch for Cannon Lake processors on 10nm was expected in 2016.
However, if Intel is contemplating taking the step of moving mutliple IC designs to TSMC's 14nm or 10nm FinFET processes, which is a non-trivial exercise, it also suggests that the company is falling behind the foundry in terms of manufacturing capability.
By the time Intel comes out on 10nm, TSMC will already have launched its 7nm manufacturing process. While TSMC's 7nm may be equivalent to Intel's 10nm there is concern as to whether Intel will be able to bring up its 10nm process any better than its 14nm process.
Intel already outsources some production to TSMC, such as Altera FPGAs and the Sofia 3G/4G application processors but this has been largely due to legacy reasons. Meanwhile customers such as Achronix that were meant to be Intel FinFET processes have migrated to TSMC.
Intel intends to give priority to manufacturing its own processors and chipsets for use in servers as these offer higher margins, and outsource entry-level H310 and several other 300 series chipsets to TSMC, the report said.
A spokesperson for Intel told eeNews Europe "In response to stronger than expected demand, we are increasing capacity at Intel's manufacturing facilities." The spokesperson did not comment on whether Intel was outsourcing 14nm production.
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