Intel CEO Lip-Bu Tan has declared that the company's massive gamble on manufacturing chips for other tech firms is finally paying off, setting up a direct, head-to-head battle with industry leader Taiwan Semiconductor Manufacturing Company (TSMC). In an interview with CNBC, Tan revealed that Intel's upcoming next-generation 14A manufacturing process is progressing so rapidly that it will debut at the same time as TSMC's equivalent technology.
Breaking the Monopoly
“It will be the same time as TSMC,” Tan stated, adding, “That is a major, major breakthrough.” The manufacturing arm of Intel, known as its foundry business, represents the most expensive and crucial piece of the company's comeback strategy. Historically, Intel used its factories exclusively to build its own computer processors. However, the company shifted strategies to open its doors to outside clients, aiming to bring advanced chip production back from Asia.
Fixing the Broken System
A major turning point has been the stabilization of Intel's current-generation 18A manufacturing process. Tan admitted that when he first took over, the state of the 18A process was “not good.” The biggest hurdle was yield, which refers to the percentage of usable, non-defective chips produced from each silicon wafer. High yields are the difference between making a massive profit or burning billions of dollars. “The best practice is to see a 7% or 8% yield improvement per month, and now I’m seeing it,” Tan explained.
Intel CEO on Partnership with Tech Giants
This sudden factory efficiency is already turning heads in Silicon Valley. Reports in the Wall Street Journal indicate that Intel has signed a preliminary blockbuster deal with Apple to produce its next-generation chips, which could be a massive blow to TSMC, which currently enjoys exclusive rights to Apple's silicon business. While Tan declined to mention Apple by name, he confirmed that a wave of major tech firms is rushing to sign up. “Multiple customers, they are working with us. We are looking forward to serving them,” Tan said. Intel is expected to announce several firm corporate commitments in the second half of this year.
