Comment by epolanski
4 days ago
I don't get it. Intel has a very huge customer for their 18A node, one that could bring billions in orders: itself.
If they themselves don't produce their chip there, why would anybody else do?
4 days ago
I don't get it. Intel has a very huge customer for their 18A node, one that could bring billions in orders: itself.
If they themselves don't produce their chip there, why would anybody else do?
Intel certainly will use 18A for their own chips:
CEO Lip-Bu Tan: "Job number one is ramping Intel 18A at scale. Intel 18A and Intel 18A-P are critical nodes for Intel Products and will drive meaningful wafer volumes well into the next decade – starting with Panther Lake later this year."
But they don't want to be the ONLY customer. Intel wants other companies to invest, and as early in the processes as possible, so Intel doesn't have to bankroll the whole thing.
"Going forward, our investment in Intel 14A will be based on confirmed customer commitments. There are no more blank checks. Every investment must make economic sense. We will build what our customers need, when they need it"
https://newsroom.intel.com/corporate/lip-bu-tan-steps-in-the...
As far as I have read, even with themselves as the primary customer, there is still enough excess capacity to make it unprofitable to use the most advanced processes. I see it as a strict cost issue — the new fab costs $X to run. Intel can only keep it running Y% of the time with its own orders. You need someone to fill in the gap. Not to mention, at the moment the entire cost of an Intel fab is being amortized across only Intel chips. If they can spread that out to external customers, then they can start to make their CPUs more cost competitive (or better margins, or both).
Plus, if the goal is to make more chips domestically (of all kinds), Intel will need to show that they can fab chips for other customers, not just their own designs.
Here's the thing, they've completely given up and started making their (inferior to AMD) CPUs on TSMC. For example, Arrow Lake is on TSMC N3B. So it's not getting amortized over anything at all and their valuation is going to 0.