“Does not preclude licensing competitors’ manufacturing techniques”

Processor giant Intel is the world’s largest manufacturer of circuits, with capacities far exceeding the contract manufacturer TSMC. Not many years ago, the company was also synonymous with having world-class manufacturing techniques, with transistor density that was several years ahead of all other players in the market.

During the transition to 14 nanometers, Intel encountered problems and had to postpone the technology, which made its debut with the processor family Broadwell in September 2014. The next step would be 10 nanometers, which was originally planned for 2015, but which due to development problems had to be repeatedly postponed. in the future. Only this year does Intel seem to have a working 10-nanometer technology that can be used on a broad front.

The result of this is that Intel in many respects has been left behind by TSMC and Samsung, something industry scientists only a few years ago thought was an impossibility. This has led investors to question whether Intel should continue to develop new technologies and invest tens of billions of dollars in investments in new factories.

In a roundtable discussion with analysts and journalists, Intel CEO Bob Swan addresses this. Initially, he talks about the advantages of having your own factories versus outsourcing production to an external party, such as TSMC. As he sees it, it gives Intel control over its “own destiny”, as they can internally adjust and expand production capacity to meet demand.

And I would just say that … possibly. And, I think strategically for us, we know that the ecosystem has evolved quite a bit over the last ten years. If there are ways or opportunities for us to leverage some of the advancements of the industry in new and different ways, I think it’s going to be very front and center for us to capitalize on industry innovations; we don’t have to do all the innovations ourselves.

Developing new manufacturing technologies is becoming more expensive and more complicated, something Intel has once again experienced when they were forced to postpone their 7-nanometer technology as well. On a question from Tom’s Hardwares editor Paul Alcorn If Intel could consider licensing manufacturing technologies from other players, Bob Swan chooses, interestingly enough, not to close the door.

Licensing manufacturing techniques by others and using in their own factories is not a new phenomenon. Close at hand is Globalfoundries, whose proprietary 14-nanometer technology was scrapped in favor of licensing Samsung’s more advanced ditto. This later became the technology used by AMD for the Zen architecture in the Ryzen 1000 and Ryzen 2000 series, as well as the Polaris graphics architecture in the Radeon RX 400 and RX 500 series.

The advantage for Intel of licensing a technology instead of outsourcing the manufacture of circuits to an external party is precisely control. Intel would thus be able to use advanced technology from TSMC or Samsung, at the same time as they themselves can expand their capacity or build new factories if necessary. The obvious disadvantage of this would be license fees and smaller margins.

The disadvantages of outsourcing production to other players have become increasingly apparent in recent years. This is especially true of AMD, which is completely dependent on TSMC for manufacturing processors, graphics chips and system circuits for all Xbox and Playstation game consoles. For months now, there has been a severe shortage of all AMD products manufactured at 7 nanometers.

More about Intel’s future manufacturing techniques: