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.