Today's Hard|Forum Post
Today's Hard|Forum Post

Thursday December 20, 2018

Intel May Leave the Custom Foundry Business

Following a update to their manufacturing plans earlier this week, rumors are swirling about Intel's future in the custom foundry business. As pointed out by SemiWiki, Intel pitched the idea of opening up their chip manufacturing business to other companies in 2014, but public info about that effort has been relatively scarce since then. Now, SemiWiki believes that Intel is "discontinuing" their custom foundry business, citing verification through "multiple sources." That's a big claim to make, and its one that's been made before, but a report from Digitimes today seemingly adds weight to those rumors. The publication's sources in the chip manufacturing industry says they wouldn't be surprised to see Intel leave the contract chipmaking market. The sources claim that Intel asks for higher prices than competitors like Taiwan Semiconductor and Samsung, and as a result, their foundry service "exists in name only, with no major clients or large orders recorded." Intel's demand for their own processors is already exceeding their ability to manufacture them, and given the claim that Intel will continue the "selective use of foundries for certain technologies where it makes sense for the business," officially closing fabs to external customers might make sense.

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It is indeed time that Intel needs to refocuse its production, the sources said. Taiwan's semiconductor firms are not surprised by Intel's possible move of quitting the contract chipmaking market, a market where the US chip giant has never really shown commitment, said the sources. It entered the market in 2010 mainly to optimize the adjustment of its own manufacturing capacities. In addition, tight 14nm and 22nm capacities have been preventing Intel from taking contract foundry orders. The sources also cited some reasons behind Intel's failure to perform well in the custom foundry market over the years. First, TSMC alone has grabbed a market share of over 50%, and other leading foundry houses Samsung and GlobalFoundries have been working hard to cement their places. Relatively higher foundry quotes offered by Intel and its weaker supply chain support than those associated with TSMC and Samsung are also among the reasons.

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