PALO ALTO, U.S. — Intel mentioned on Thursday that it’ll possible broaden its manufacturing outsourcing of chip merchandise over the subsequent few years as the corporate reported report annual earnings for 2020.
The U.S. chip large has been underneath growing stress to outsource manufacturing to foundries akin to its longtime associate Taiwan Semiconductor Manufacturing Co. after the corporate bumped into delays introducing its personal 7-nanometer chip manufacturing expertise.
“I’m assured that almost all of our 2023 merchandise will likely be manufactured internally. On the similar time, given the breadth of our portfolio, it is possible that we are going to broaden our use of exterior foundries for sure applied sciences and merchandise,” incoming Intel CEO Pat Gelsinger mentioned on Thursday.
Bob Swan, Intel’s present CEO, mentioned exterior foundry companions can “play a bigger position” within the manufacturing of its next-generation CPU, which is ready to be rolled out in 2023. The ultimate manufacturing determination for the 2023 product lineup will likely be made by Gelsinger, an trade veteran and former Intel CTO who will take over from Swan on Feb. 15.
Till now, Intel has designed and manufactured the majority of its most necessary merchandise in-house, a method that helped it dominate U.S. chipmaking for practically 50 years. However delays in rolling out its personal newest chip manufacturing applied sciences to match the rise of Asian chipmaking giants like TSMC and Samsung Electronics, have weighed on Intel’s market share in recent times.
For 2020, Intel posted report annual gross sales of $77.9 billion, up from $72 billion in 2019, exceeding analysts’ expectations. Nonetheless, its shares dropped practically 5% in after-hours buying and selling, after the corporate introduced plans to outsource extra chip manufacturing and delayed the announcement of its 2021 full-year outlook.
Outcomes for the December quarter additionally hit a report, with gross sales of $20 billion, due to pandemic-driven demand for private computer systems and chips.
Amid struggles with manufacturing delays, Intel has come underneath mounting stress from newcomers akin to Nvidia and AMD, particularly within the profitable 5G chip and information middle companies. Intel’s primary rivals usually contract with exterior foundries to fabricate their designs.
Nikkei Asia beforehand reported that Intel is in talks for at the least 5 initiatives with TSMC with a view to outsourcing manufacturing of a few of its flagship processors for a variety of units, together with laptops, servers and edge-computing units, to the world’s largest contract chipmaker.
Intel is already a longtime TSMC buyer, having outsourced manufacturing of some graphics processors, modems, AI accelerators and different peripheral chips to the Taiwanese contract chipmaker. Nonetheless, if the 2 firms attain a deal for these 5 initiatives, it will be the primary time that Intel determined to outsource such a variety of key processor merchandise.
The corporate has additionally been in talks with one other Asian chipmaker, Samsung Electronics, for chip manufacturing.
