TSMC Beats Out Samsung As Wafer Supplier for Intel

TSMC proves a winner, gaining a significant momentum to consolidate its leadership in global foundry chip market.

The world’s largest contract chip maker beat out Samsung Electronics as a sole wafer supplier of Intel Corp., as the world’s largest PC CPU titan is now mapping out a series of novel, new chip architectures for PCs and data centers.

Intel said at its Architecture Day 2021 that it will outsource fabrication of its two new GPU chips   to TSMC – Alchemist and Ponte Vecchio.

The PC CPU giant will entitle TSMC to fabricate the Alchemist GPU of Intel design with a N6 chip process technology, which is TSMC’s 6 nanometer design rule.

Scheduled to go on sale under a brand name of Arc in the first quarter of 2022, the Alchemist GPU is a sort of consumer GPU for PC gaming enthusiasts. The chip comes built with Intel’s X HPG microarchitecture.

Based on Intel’s X HPC microarchitecture for high-performance computing and artificial intelligence workloads, the Ponte Vecchio GPU comes built with many different IP tiles in what’s called as a modular type, zeroing in on server and supercomputer market. IP tiles refer to sub-components of chips.  

Conflicts of Interests

“Several elements of these graphics chips will be manufactured externally using TSMC’s N6 and N5 process technologies, said Stuart Pann, senior vice president of corporate planning group with Intel in his blog post.

According to Intel’s product roadmap, TSMC will fabricate some tiles of the Ponte Vecchio GPU with its N6, or 6nm node technology, while Intel will manufacture the rest with its own 4nm node technology.

The outsourcing decision came on top of Intel’s earlier decision to source the fabrication of some subcomponents or tiles of Meteor Lake CPU from TSMC. Intel will fabricate core computing components like arithmetic and logic units of the CPU with its cutting edge 4nm node technology, while outsourcing the fabrication of some supporting components to TSMC.

True enough, Intel is one of the few remaining IDM or integrated device manufacturers that design and manufacture its own chips. Yet, the chip maker has been expanding the ratio of external outsourcing chip fabrication versus the total, working together with an increasing number of   foundry chip makers like TSMC.

Today, Intel outsources about 20% of its chip fabrication to foundry chip makers.

The increasing portion of external production is a clear illustration of how rapidly he IDM business model has been losing its competitive edge.

As chip node technology has been rapidly scaling down to near-atom level like 3nm and 5nm nodes, costs of chip design and fabrication have been exponentially escalating, pressing IDMs to turn to foundry chip makers for sharing costs. TSMC is better poised to server fabless and IDM chipmakers than Samsung, as it is a pure foundry chip maker that produces no chip of its own design, but just chips of other makers’ design. On the contrary, Samsung has come both ways, taking a blame for conflicts of interests with its customers