Intel To Spend $9.7 Billion On TSMC Outsourcing In 2025: Goldman Sachs

Intel Meteor Lake driver
(Image credit: Momomo_us)

While Intel's management is getting increasingly optimistic about the company's upcoming fabrication technologies and manufacturing prowess, analysts from Goldman Sachs, an investment bank, believe that Intel might increase outsourcing of its products to TSMC, reports Taiwan-based Commercial Times (via TrendForce). And this may be a good sign for Intel.

The analysis from Goldman Sachs indicates that the overall market potential for Intel's outsourcing orders in 2024 and 2025 is projected to be $18.6 billion and $19.4 billion, respectively. This means a hypothetical situation in which Intel outsources all of its products, which is hardly a possible scenario. According to Goldman Sachs, in a more realistic turn of events, TSMC might land $5.6 billion and $9.7 billion of orders from Intel in 2024 – 2025.

Virtually all of Intel's high-volume client PC products from the second half of 2023 and onwards rely on multi-chiplet design, with some of the chiplets made by Intel in-house and some produced elsewhere. Therefore, it is reasonable that as the company ramps up production of its chiplets, it has to produce more companion chiplets at TSMC. Since Intel sells a complete product, it gets its high margins. Meanwhile, since the information comes from a third party, not from Intel, it has to be taken with a grain of salt.

For now, it is hardly a good business to foretell Intel's manufacturing strategy for the 2024 – 2025 period. By now, all contracts for the period have been signed, and if Intel allocated specific production capacity at TSMC, it probably had reasons to do so.

As far as TSMC is concerned, if the information from Commercial Times is correct, then Intel will make up roughly 6.4% and 9.4% of TSMC's total revenue each year. Yet, neither Intel nor TSMC have confirmed the information.

Anton Shilov
Contributing Writer

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.

  • Co BIY
    The market is growing so fast that Intel, TSMC and Samsung may not be able to build out fast enough.

    Imagine when China and India (as stand ins for all the lower consumption economies) are consuming microelectronics at the same rate as the US and Western Europe. That is a lot of growth.
    Reply
  • Amdlova
    With these news amd will be dead...
    Reply
  • George³
    Interesting. I wonder if they have been waiting for that chip law money to spend outside the US?
    Reply
  • Laika21
    That was the plan, USA will invite TSMC in the land and then hijack+steal their technologies.
    Reply
  • Neilbob
    Amdlova said:
    With these news amd will be dead...
    If this article is in any way true, and if Intel could snap up enough TSMC capacity to stifle AMD (and other competitors), I'd have to assume (or hope) that they'd be given a bit of a slap for monopolistic practices.
    Reply
  • Amdlova
    Laika21 said:
    That was the plan, USA will invite TSMC in the land and then hijack+steal their technologies.
    Why need to steal or hijack something from TSMC ? Do you belive the US don't have any tech better than TSMC?
    Reply
  • JamesJones44
    Neilbob said:
    If this article is in any way true, and if Intel could snap up enough TSMC capacity to stifle AMD (and other competitors), I'd have to assume (or hope) that they'd be given a bit of a slap for monopolistic practices.
    Intel would need significant market share of chip production for the JD or EC to even take a look. Considering Apple (16 billion just last year) would be at the front of Intel in line, I doubt there would be any chance of a "slap" simple because they bought more production capacity than AMD but less than Apple. This isn't even mentioning Nvidia's 7 billion.

    9.7 billion from Intel isn't really all that much capacity when you mix in Apple and Nvidia who combine for 23 billion.
    Reply