Intel faces three sequential problems: fix manufacturing, start designing competitive products again, and win some customers for IFS. Then they have to keep all that going. Not impossible, just very challenging.
We did some math to show market share and profit share in the foundry business. This data maps to intuition, but the scale of TSMC’s dominance and Intel’s declining fortunes stand out.
China actually has as much trailing edge semis capacity as the US. With ~90% of the world’s chips still produced on these older nodes, we can understand why everyone wants to build these fabs, even if the commercial reasons for them are less compelling.
Everyone tends to forget that most of the world’s semiconductor capacity runs on old nodes. The trailing edge has a lot to offer and is in many ways just as important to the supply chain as the leading edge.
TSMC has world leading semi manufacturing skills, but Morris Chang’s claim of “50% cost advantage” has more to do with currency than hazy notions about the US workforce’s capabilities. Nonetheless, bringing fabs back to the US will be challenging.
Intel Selects Option C – All of the Above – Intel is going to invest $20 billion in manufacturing and open up its fabs to outside foundry customers. A bold confident signal, now they just have to execute on it.
The irony is, at a time when the US is looking for government subsidies for specific chip companies, China is using turbocharged capitalism to build its next generation of chip companies.
UPDATED: This is an updated version of our post to reflect TSMC’s announcement this morning. This has been a busy week for the semiconductor industry. This topic has been eating […]
There have been some important developers in the semiconductor market this week that have unsettled the semiconductor world. The news was that Global Foundries has exited the market for 7nm […]