Intel May Start Outsourcing Some CPU Production to TSMC in 2H 2021

Intel confirmed plans to outsource production of some of its graphics processors to Taiwan Semiconductor Manufacturing Co. about half a year ago and then outlined plans to produce some of its 'Atom and Xeon system-on-chips' at TSMC. The company also recently reiterated intentions to more actively use third-party manufacturing and based on a report from TrendForce, Intel's outsourcing plans now include production of its Core processors at TSMC.

The world's largest supplier of microprocessors intends to produce some of its Core i3 processors at TSMC using the latter's N5 (5 nm) fabrication process starting from the second half of 2021, reports TrendForce, a technology consulting firm from Taiwan. At present, it is unclear which microarchitecture the new CPUs will use and whether they will rely on any known CPU design, but by 2H 2021 Intel will have at least three competitive up-to-date microarchitectures in its possession, including Willow Cove, Golden Cove, and Cypress Cove.

Analysts from TrendForce also claim that Intel will outsource production of undisclosed mid-range and high-end CPUs to TSMC in the second half of 2022. The processors will reportedly be made using TSMC's N3 (3 nm) fabrication process. It should be noted that in the second half of 2022 TSMC plans to offer both N4 (which is IP-compatible with N5) and N3 process technologies with the latter being primarily aimed at TSMC's alpha customer, Apple.

The information about Intel outsourcing its Core i3 and other CPUs to TSMC is unofficial, Intel has never confirmed, so take it with a grain of salt. It does make sense for Intel to outsource some of its entry-level and, perhaps, mid-range processors to a third party to free up its own manufacturing capacity for higher-end CPUs. In particular, it will be especially beneficial for Intel to produce more advanced Xeon Scalable 'Ice Lake', Core i5/i7 'Tiger Lake-H', and Core i5/i7 'Alder Lake' processors using its 10 nm process technologies at its own fabs while outsourcing production of cheaper products to others.

Intel has officially confirmed plans to use TSMC's capacities to make compute layer of its Xe-HPC codenamed Ponte Vecchio GPU as well as its Xe-HPG gaming GPUs. For competitive reasons, the company did not disclose which node it intends to use for the said graphics processors. Some believe that Intel will use TSMC's N6 fabrication process, but there are reports that the company will use a custom version of TSMC's N7 for its gaming GPUs.

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Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

3 Comments Comment from the forums

JarredWaltonGPU

I have to say, this whole thing seems bunk to me -- a bit of a red herring. If Intel has working high-end process technology (like SuperFIN, and whatever the 7nm and 5nm followups are called), it should have ample manufacturing capacity. TSMC is already tapped out with Apple, AMD, Nvidia, Qualcomm, etc. parts. If Intel can't make silicon for entry level parts, then how is it going to make high-end parts? I suspect the initial talk is about Core i3 and lower end parts just to try and calm the panic, but if TSMC makes a 4-core/8-thread Core i3, and that part works well, it will probably do just as good on Core i5, i7, i9. And saying it will do Core i3 and Xeon means it would be making chips potentially at the top and bottom of Intel's CPU stack.

What will really be interesting is if TSMC makes some Intel chips that end up being better than the chips Intel fabs internally. Imagine four years from now, people trying to find "Intel made by TSMC" processors instead of "Intel made by Intel" chips. LOL
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Simon Brown

What I would be interested in is the commercial implication on AMD, Apple etc. of having production capacity they might require, booked up by such a large competitor.
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TerryLaze

JarredWaltonGPU said:
I have to say, this whole thing seems bunk to me -- a bit of a red herring. If Intel has working high-end process technology (like SuperFIN, and whatever the 7nm and 5nm followups are called), it should have ample manufacturing capacity. TSMC is already tapped out with Apple, AMD, Nvidia, Qualcomm, etc. parts. If Intel can't make silicon for entry level parts, then how is it going to make high-end parts? I suspect the initial talk is about Core i3 and lower end parts just to try and calm the panic, but if TSMC makes a 4-core/8-thread Core i3, and that part works well, it will probably do just as good on Core i5, i7, i9. And saying it will do Core i3 and Xeon means it would be making chips potentially at the top and bottom of Intel's CPU stack.

What will really be interesting is if TSMC makes some Intel chips that end up being better than the chips Intel fabs internally. Imagine four years from now, people trying to find "Intel made by TSMC" processors instead of "Intel made by Intel" chips. LOL
Intel had the same revenue for the last three years, ever since ryzen launched it increased by 10bil and stayed there, that could be a sign of intel being at their production cap and not being able to produce more. Hence the need to build outside to meet the increased demand. That is if the demand stays increased now that things will slowly go back to normal from covid.

If they end up making i3s and xeons there they will make sure that they will perform the exact same as the ones they make in house, these are low clock CPUs so TSMC should be capable of making them.
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