Intel has outsourced the production of about 15-20% of its non-CPU chips, with most of the wafer starts for these products assigned to TSMC and UMC, according to TrendForce’s latest investigations. While the company is planning to kick off mass production of Core i3 CPUs at TSMC’s 5nm node in 2H21, Intel’s mid-range and high-end CPUs are projected to enter mass production using TSMC’s 3nm node in 2H22.

In recent years, Intel has experienced some setbacks in the development of 10nm and 7nm processes, which in turn greatly hindered its competitiveness in the market. With regards to smartphone processors, most of which are based on the ARM architecture, Apple and HiSilicon have been able to announce the most advanced mobile AP-SoC ahead of their competitors, thanks to TSMC’s technical breakthroughs in process technology.

With regards to CPUs, AMD, which is also outsourcing its CPU production to TSMC, is progressively threatening Intel’s PC CPU market share. Furthermore, Intel lost CPU orders for the MacBook and Mac Mini, since both of these products are now equipped with Apple Silicon M1 processors, which were announced by Apple last year and manufactured by TSMC. The aforementioned shifts in the smartphone and PC CPU markets led Intel to announce its intention to outsource CPU manufacturing in 2H20.

TrendForce believes that increased outsourcing of its product lines will allow Intel to not only continue its existence as a major IDM, but also maintain in-house production lines for chips with high margins, while more effectively spending CAPEX on advanced R&D. In addition, TSMC offers a diverse range of solutions that Intel can use during product development (e.g., chiplets, CoWoS, InFO, and SoIC). All in all, Intel will be more flexible in its planning and have access to various value-added opportunities by employing TSMC’s production lines. At the same time, Intel now has a chance to be on the same level as AMD with respect to manufacturing CPUs with advanced process technologies.

(Cover image source: Taiwan Semiconductor Manufacturing Company, Limited )

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

An abnormality which caused a power outage in the GIS (gas insulated switchgear) equipment at UMC’s facilities on Lixing Road, Hsinchu, resulted in a voltage drop for other fabs located in the surrounding area, according to TrendForce’s latest investigations.

Affected foundries include TSMC, Vanguard, and PSMC. However, TrendForce’s investigations also reveal that, apart from the temporary power outage at UMC’s Lixing fabs, facilities operated by TSMC, Vanguard, and PSMC experienced only a temporary voltage drop. While the uninterruptible power supplies of the facilities kicked in shortly after the outage, normal manufacturing operations resumed following certain equipment crashes that occurred during the transition from one power source to another. UMC’s Lixing fab has currently resumed operations after about four hours of power outage, and TrendForce expects the impact from this incident to be minimal.

TrendForce believes that the total production capacity in the affected area accounts for about 20% and 4% of the respective global production capacity of 8-inch wafers and 12-inch wafers. Although the affected area is a strategically significant location of semiconductor production, investigations show that this incident resulted in a mere voltage drop for the immediate surroundings, and the affected parties have resumed operation after making adjustments.

As such, their overall production capacities have not been substantially impacted. With regards to UMC, the power outage primarily took place at its Fab 8A(B), which focuses on the 0.25~0.5µm processes mainly used to produce power discretes such as MOSFET, whereas Fab 8C/D, which primarily produces DDIs and PMICs with 0.35~0.11µm processes, sustained minimal impact from the voltage drop. The incident’s impact on UMC is expected to come to less than 1% of the foundry’s yearly revenue, which can be essentially compensated for through hot runs.

TrendForce indicates that UMC manufactures driver ICs (mainly with 8-inch 0.11~0.15µm processes) at Fab 8C/D for certain desktop and notebook monitors. With regards to driver ICs, the power outage incident is expected to have very limited impact on their global supply. However, as large-sized driver ICs have been in shortage since 2H20, this incident may exacerbate the industry-wide panic over the availability of driver ICs, thereby resulting in additional upward momentum ensuring persistent price hikes for large-sized driver ICs and IT display panels.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com