Question Taiwan Report: Intel has reached an agreement with TSMC

[maddie]

I certainly hope you're right. But think about it, Intel can toss a wrench directly into the heart of AMD by taking away their foundry capacity. That is one tempting play, and Intel has proven consistently they have zero ethics.

The thing is that Intel can't 'take foundry capacity'. Also remember that there are many other clients for TSMC's leading edge process. It's not only Apple and AMD. Are you saying that these will also be discarded so that TSMC can put itself in the position of basically being totally reliant on one historically unethical company that can also be a direct competitor?

 

[JasonLD]

At which point the leading clients at TSMC will be migrating or have already migrated to 5nm. This alone contradicts the belief that Intel will monopolize leading edge nodes.

Related article saying Intel is also planning to use TSMC 3nm in 2022.

 

[maddie]

Related article saying Intel is also planning to use TSMC 3nm in 2022.

I say, let them plan, they'll get a piece, not all. It's probably in TSMC best interest to have a near parity between Intel and AMD. So let's start thinking instead that they each will end up with close to 50% of the TAM.

 

[JasonLD]

I say, let them plan, they'll get a piece, not all. It's probably in TSMC best interest to have a near parity between Intel and AMD. So let's start thinking instead that they each will end up with close to 50% of the TAM.

I honestly think TSMC doesn't care about Intel vs AMD. Their best interest is staying ahead of Samsung, not what goes between AMD vs Intel. More AMD and Intel compete for wafer allocation, TSMC will be the one smiling.

 

[aigomorla]

I honestly think TSMC doesn't care about Intel vs AMD.

well not to mention they also fab nVidia.

 

[Kenmitch]

I say, let them plan, they'll get a piece, not all. It's probably in TSMC best interest to have a near parity between Intel and AMD. So let's start thinking instead that they each will end up with close to 50% of the TAM.

It'll be interesting to see what happens in the end. I'd imagine Apple, AMD, and the current others have some king of future node agreements in place. Maybe no fixed $ amounts, but dibs at least open up possibilities.

Thermals? Clockspeed? Who knows if Intel can compete on the same node anyways. Time will tell in the end.

 

[beginner99]

Not sure this is abad thing for AMD and consumers in the short to mid term. I'm pretty sure AMD has secured the wafers they need for 7nm and also have contracts in place for 5nm. It's not like TSMC can just take away wafers from AMD or make them more expensive retrospectively. Only thing bad is if AMDs demand is much higher than anticipated.

And yeah intels order can only be for server CPUs as well. These are the ones that don't yield on 10nm.

 

[DooKey]

I doubt this is happening, but if it is it's just business. TSMC will sell wafers to anyone who can pay the price. If Intel is willing to pay more for more wafers than AMD that's just good business for TSMC. I don't see this as anything immoral, illegal, or illicit. It's just business. Supply and demand.

 

[beginner99]

I don't understand why it's the 6/7nm process they are buying in? It's performance is similar to Intel's 10nm, so they'd have to put in a lot of design effort for a process similar to theirs. I can't see TSMC's process hitting the 5+GHz mark for Intel judging by AMD's chips, so I really don't see the point in this.

5nm might be too costly or no capacity. For Ponte Vecchio and Sapphire Rapids (server cpu) they don't need to hit 5 ghz at all. In fact power efficiency is much more important.

 

[moinmoin]

well not to mention they also fab nVidia.

That's where it gets interesting. AMD is not a bleeding edge customer, but it is a early node consumer, getting access to the node before publication, allowing it more time for adapting its design to the node. TSMC likes to give preferential treatment to such customers. Now such early access comes with exclusivity, you can't be in bed with several foundries at once and still get early access. Nvidia tried to play TSMC off against Samsung, and with the latter messing up Samsung is delaying Nvidia, and Nvidia had to wait for TSMC to be willing to give access.

It will be very interesting how TSMC is going to treat Intel in these regards. And looking beyond, Apple may not be interested in having "its own" bleeding edge node being shared with Intel. On the other hand Intel still has the money to become a second Apple, essentially funding TSMC to build all the required capacity, making Intel a first mover client along Apple. Not sure Intel really wants to go down that road though, at that point they really may want to become fabless.

 

[sdifox]

Maybe this will be in TSMC Arizona?

 

[ondma]

I doubt this is happening, but if it is it's just business. TSMC will sell wafers to anyone who can pay the price. If Intel is willing to pay more for more wafers than AMD that's just good business for TSMC. I don't see this as anything immoral, illegal, or illicit. It's just business. Supply and demand.

It Intel does it, it has to be illegal. /s

 

[Doug S]

It will be very interesting how TSMC is going to treat Intel in these regards. And looking beyond, Apple may not be interested in having "its own" bleeding edge node being shared with Intel. On the other hand Intel still has the money to become a second Apple, essentially funding TSMC to build all the required capacity, making Intel a first mover client along Apple. Not sure Intel really wants to go down that road though, at that point they really may want to become fabless.

Why should Apple care if Intel gets access to the same process they have? Apple does not compete with Intel, unless Apple starts selling their SoCs on the open market for third parties to make Windows ARM PCs out of. No one should hold their breath waiting for that!

 

[Doug S]

This reads like one of those stories where "people were talking about the possibility" and then rumors of a deal being signed and people read it as "the possibility is real".

Intel has a contractual obligation to deliver CPUs for the Aurora in 2021. It is clear now that 7nm will not be able to deliver that capacity, so making a deal with TSMC makes sense. I think it is likely a lot of speculation or wishful thinking that Intel has signed a deal that they will stop developing future processes. It seems unlikely such a deal would be signed the weekend after their quarterly results where they didn't give even a hint that they were considering throwing the towel in completely. Maybe they will get there, but I really doubt such a decision has already been made.

If it is true, the US government needs to realize that fab technology is critical in a lot of ways and act to keep leading edge fabs operating in the US. If we can spent trillions on coronavirus relief, surely they can find a few billion or even tens of billions to insure such fabs remain in the US, operating under the control of US company/companies (a JV seems the most likely way to accomplish this)

Honestly Intel, TSMC, Samsung, Toshiba, and Micron ought to get together, co-develop process technology, and license its use by the various companies (sharing cost based on how many wafers each runs so the ones who use more pay a larger share so they can't squeeze the others out) It would probably take the US, Taiwan, Japan and South Korea governments working together, along with those companies, to make this happen.

 

[Doug S]

Maybe this will be in TSMC Arizona?

No, why do people not understand how small that fab is (at least as currently planned) compared to TSMC's fabs in Taiwan, and how it will begin construction next year targeting 5nm capacity meaning it will be 3-4 years out of date when it is finished. It is not leading edge capacity, and even if every single wafer was devoted to making iPhone SoCs, it could only make 75% of what Apple needs each year.

If this deal with Intel is true maybe the plans for the Arizona fab undergo a huge change, or maybe Intel's Arizona fabs change hands, obviously their current plans would have be reconsidered. But as it stands, TSMC's Arizona fab is a non-factor for anyone who needs a lot of wafers and/or leading edge capacity.

 

[naukkis]

I don't understand why it's the 6/7nm process they are buying in? It's performance is similar to Intel's 10nm, so they'd have to put in a lot of design effort for a process similar to theirs. I can't see TSMC's process hitting the 5+GHz mark for Intel judging by AMD's chips, so I really don't see the point in this.

Reason is that Intel 10nm is broken. They can't produce 10nm chips in needed amounts, and producing 10nm chips in their own fabs is much, much more expensive than producing those chips with TSMC. Probably Intel 10nm design backporting to 6nm TSMC is quite easy if Intel did get the tools ready.

 

[teejee]

I doubt this is happening, but if it is it's just business. TSMC will sell wafers to anyone who can pay the price. If Intel is willing to pay more for more wafers than AMD that's just good business for TSMC. I don't see this as anything immoral, illegal, or illicit. It's just business. Supply and demand.

TSMC is a supplier, and if you rely on a supplier of course you have long term contracts and agreement to secure the supply. And TSMC would not be where it is today if it ignored such agreements.
No one would even start to develop CPU/GPU/SOC’s etc that takes 3+ years to develop if you aren’t sure you have production capacity secured. So Intel will not take capacity that AMD has already secured.

 

[DooKey]

TSMC is a supplier, and if you rely on a supplier of course you have long term contracts and agreement to secure the supply. And TSMC would not be where it is today if it ignored such agreements.
No one would even start to develop CPU/GPU/SOC’s etc that takes 3+ years to develop if you aren’t sure you have production capacity secured. So Intel will not take capacity that AMD has already secured.

Where did I say Intel would take AMD's secured wafer supply?

 

[vigilant007]

Oh man, if this is true, then this is epic.

I’m so incredibly over people defending Intels fab


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[AnandThenMan]

The thing is that Intel can't 'take foundry capacity'. Also remember that there are many other clients for TSMC's leading edge process. It's not only Apple and AMD. Are you saying that these will also be discarded so that TSMC can put itself in the position of basically being totally reliant on one historically unethical company that can also be a direct competitor?

I'm not saying Intel will succeed but it is smart business for them to try and squash AMD by shifting TSMC production to Intel. Whether TSMC bites and how that could happen I don't know. But I wouldn't discount it outright.

If Intel doesn't do this how are they going to compete in the next few years?

 

[senseamp]

Get ready to pay more for chips on latest nodes. TSMC is in the driver's seat and they know it. Mobile and datacenter care most about the efficiency of latest nodes, so they'll pay through the nose for it. PC enthusiasts will get whatever scraps are left until Intel fixes their mess. I read today Intel bought almost as much capacity as AMD at 180000 wafer vs 200000, and TSMC is fully booked for early 2021. That means zero sum game if you have higher than expected demand. If AMD sees high CPU demand, they'll cut GPU supply, because they can easily sell a smaller die CPU with no board and no RAM for more than a GPU.

 

[senseamp]

What does this mean for engineers working on the 14nm, 10, 7 5, 3, 2? nodes?

Process engineers and material scientists? They are sitting pretty. New college grads are all headed for AI and data science, but now we find out who the essential workers are, so if you are one of the few guys with deep expertise in manufacturing process, I think your day in the sun is coming.

 

[ThatBuzzkiller]

If it is true, the US government needs to realize that fab technology is critical in a lot of ways and act to keep leading edge fabs operating in the US. If we can spent trillions on coronavirus relief, surely they can find a few billion or even tens of billions to insure such fabs remain in the US, operating under the control of US company/companies (a JV seems the most likely way to accomplish this)

Honestly Intel, TSMC, Samsung, Toshiba, and Micron ought to get together, co-develop process technology, and license its use by the various companies (sharing cost based on how many wafers each runs so the ones who use more pay a larger share so they can't squeeze the others out) It would probably take the US, Taiwan, Japan and South Korea governments working together, along with those companies, to make this happen.

Then the politics needs to change to enable this. Democrats have to stop being anti-corporation since it is these businesses that generate the most value in the national economy and republicans have to start being pro-subsidies so that quicker development can happen but both are so far failing to empower their early technological advantages ...

If the american government truly cared about being ahead then they should place sanctions TSMC as well so that they can sink into oblivion in order to let the likes of those in their domestic industry such as Intel to prosper. It should've been mandated in law that american businesses are forced to supply from a domestic foundry even if it meant them coming to an agreement with Intel ...

 

[sandorski]

Then the politics needs to change to enable this. Democrats have to stop being anti-corporation since it is these businesses that generate the most value in the national economy and republicans have to start being pro-subsidies so that quicker development can happen but both are so far failing to empower their early technological advantages ...

If the american government truly cared about being ahead then they should place sanctions TSMC as well so that they can sink into oblivion in order to let the likes of those in their domestic industry such as Intel to prosper. It should've been mandated in law that american businesses are forced to supply from a domestic foundry even if it meant them coming to an agreement with Intel ...

Bolded is False. Small Business is what drives the Economy the most.

 

[sdifox]

Then the politics needs to change to enable this. Democrats have to stop being anti-corporation since it is these businesses that generate the most value in the national economy and republicans have to start being pro-subsidies so that quicker development can happen but both are so far failing to empower their early technological advantages ...

If the american government truly cared about being ahead then they should place sanctions TSMC as well so that they can sink into oblivion in order to let the likes of those in their domestic industry such as Intel to prosper. It should've been mandated in law that american businesses are forced to supply from a domestic foundry even if it meant them coming to an agreement with Intel ...

LoL capitalist until you cannot compete, then bring on protectionism...