Intel's lack of production capacity depends on TSMC within three years

In 2021, Intel announced an investment of US$20 billion to build two fabs in Arizona. In early 2022, it decided to invest another US$20 billion to build two advanced process fabs in Ohio, and it does not rule out that the Ohio factory will be expanded to 8 in the future. A cluster of very large wafer fabs. It remains to be seen whether Intel CEO Pat Gelsinger's big investment plan can really reverse the trend, but Intel is most short of production capacity. Before 2025, it can only increase its processor shipments by expanding the entrustment of TSMC's foundry. .

Intel’s production capacity investment in the past 10 years has been significantly conservative. After the outbreak of the new crown pneumonia epidemic in 2020, the digital transformation that would have taken more than 5 years was shortened and completed in 2 years, resulting in a serious shortage of global semiconductor production capacity. Intel is the world's largest processor supplier. It lacks its own production capacity and has not established an outsourced production chain. Under the situation of capacity shortage, the market share of its competitor AMD continues to rise.

Kissinger will return to Intel as CEO in 2021, and will begin to make major organizational and strategic adjustments, publish the IDM 2.0 strategy, and announce that he will expand investment in the United States to increase production capacity. After nearly a year, Intel has announced that it will invest US$20 billion each to expand new fabs in Arizona and Ohio. At the same time, Intel has also tightened its cooperation with TSMC. At the end of 2021, Kissinger also made a special trip to Taiwan during the epidemic. , It is necessary to expand the 3nm process wafers produced by TSMC.

The core of Intel's IDM 2.0 strategy is to build its own production capacity and expand its outsourced foundry to solve the problem of serious shortage of production capacity. In the part of self-built production capacity, due to the increasing investment in semiconductors, Intel's cash flow still has a lot of pressure to support the huge investment in a short period of time. Kissinger therefore actively sought subsidies from the US government. As for the outsourcing part, Intel can only firmly hold on to TSMC, and it has to break the tradition of all self-made advanced process processors in the past, and began to entrust the computing chips (tiles) of some processors to TSMC.

In addition, Intel has faced another operational problem in the past few years, which is the bottleneck in the process advancement. More than three generations of processors have stayed at 14nm, and after the subsequent transition to 10nm, they are also facing the pressure of slow yield improvement, resulting in the speed of processor generation alternation. Slow down, thus giving rival Supermicro an opportunity to take advantage.

Kissinger released a new technical blueprint after taking office, announcing that it will enter the angstorm era in 2024 and launch the Intel 20A (2nm) process, including the RibbonFET surround gate (GAA) transistor architecture, which is equivalent to going hand in hand with TSMC. From this point of view, in order for Intel to regain the lost market share in 2025, in addition to its own process and production capacity, it must be properly matched and there is no shortage, but also TSMC's technology and production capacity assistance.