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Intel's Gelsinger Backpedals, Calls TSMC 'Spectacular' at Bargaining Table

Intel
(Image credit: Intel)

After calling Taiwan a geopolitically unstable location for manufacturing, Intel CEO Pat Gelsinger flew to the country to negotiate with rival foundry TSMC about outsourcing more of Intel's own chip manufacturing to the company. Unsurprisingly, Gelsinger's rhetoric changed on the trip as he admitted that TSMC's contract production model has largely enabled a bustling ecosystem of chip production and innovation. He also said that Intel would continue to invest in Taiwan but still stressed that the global chip production chain must be balanced.

"TSMC has unlocked the magic of silicon for us and others in the industry in so many ways," said Gelsinger in a pre-recorded video (below). "What TSMC has done is spectacular. At the heart of much of this is innovation indigenization is Taiwan. It is nothing short of amazing what Taiwan has become in the last several decades."

For Intel, Taiwan is a very special place, and TSMC is a very special frenemy. Intel is pursuing a new IDM 2.0 strategy that will find it producing chips for others, much like TSMC, making other foundries in Taiwan its rivals. But for a company that outsources production of some of its products and which also works with various Taiwan-based OEMs, ODMs, and manufacturers, Taiwan is extremely important.  

To that end, Intel will continue to invest in Taiwan (and even in China despite geopolitical tensions between the U.S. and the P.R.C.) as long as it remains a major high-tech development and production hub. In fact, Intel already outsources more than 25% of its production to external chipmakers like TSMC. 

However, as an IDM 2.0 company that has a global semiconductor production network, Intel will continue to emphasize the importance of an international supply chain with fabs located in different parts of the world. To a large degree this happens because it is extremely hard for Intel to compete against companies in Taiwan and South Korea as they get huge incentives and support from their governments when they build new fabs. 

"We, the semiconductor industry, need to find a global solution that satisfies the incredible demand for our technology," said the head of Intel. "We must build factories faster, run them at higher yields, install more equipment, and do so in a way that balances the global supply chain for the future."

  • Jim90
    Lol, rest assured that TSMC will make Intel pay for those comments.
    Reply
  • spongiemaster
    Rest assured, the people negotiating these deals are not thin skinned petty fanboys. There are plenty of examples of companies flinging lawsuits at each while still doing significant business with each other. CEO's trash talking each is mild in comparison and business as usual.
    Reply
  • VforV
    This kind of two face and duplicity I've never seen from Dr. Lisa Su...

    Yeah, intel will always be intel. I thought this guy is better, but who am I kidding he has the same "DNA" as those working there, he's one of their OG for a reason (with both goods and bads)... I just thought maybe, maybe he got better with age... pffft.

    AMD, as long as you're not as scummy as intel and nvidia, I will prefer you. Just don't drop the ball to their level, because I don't follow blindly...
    Reply
  • mitch074
    Ok, so in a nutshell:
    Intel: "TSMC suck, because they're in Taiwan"
    TSMC: "Intel is old and not agile"
    Intel: "TSMC's process is not as good as they say it is, because metrics. Also, we're using a PR rating on our process node names now, because metrics suck."
    TSMC: "we've been using the same measurements for our rating for the last 20 years. We have the next 3 nodes in pre-production, too."
    Intel: "we're so successful, we're using all our capacity now; we need to outsource some of our production - even on process nodes we just can't master in time."
    TSMC: "we're good."
    Intel: "TSMC are good enough for us. We need them."
    TSMC: "work at it more if you want that discount."
    Reply
  • Jim90
    spongiemaster said:
    Rest assured, the people negotiating these deals are not thin skinned petty fanboys. There are plenty of examples of companies flinging lawsuits at each while still doing significant business with each other. CEO's trash talking each is mild in comparison and business as usual.

    Lol, you need to dig a bit deeper to understand what I really said.
    Reply
  • dalek1234
    "TSMC 'Spectacular' at Bargaining Table"Sounds to me like Intel didn't get what they wanted at this negotiating table.
    Reply
  • Endymio
    VforV said:
    This kind of two face and duplicity I've never seen from Dr. Lisa Su...
    Despite the sensationalistic claim of "backpedaling", there is no contradiction between the statements that "Taiwan is a geopolitically unstable location for manufacturing" and "TSMC is spectacular at bargaining". The former is indisputably correct, and there is no reason to doubt the veracity of the latter claim either.
    Reply