From 2H2021 TSMC will be producing Intel CPUs on 5nm (and beyond)

[Master Disaster]

We heard rumours about this last week and it seems like Trendforce has now confirmed the news.

 

Edit - As pointed out by @porinaits not actually confirmed until Intel and/or TSMC makes a statement so consider this a rumour.

 

Intel will be outsourcing some of its non CPU wafer production to TSMC and UMC starting immediately, TSMC will be producing I3 CPUs from 2H21 on 5nm and will be producing most of Intels I5 & I7 CPUs from 2H22.on 3nm.

Quote

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.

Its believed Intel is planning to keep production of its most profitable CPUs (I guess I9s & Xeons?) in house but moving to TSMC will allow Intels engineers to take advantage on production tech they their own fabs don't have access too (such as chiplet designs).

Quote

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.

Source - http://www.trendforce.com/presscenter/news/20210113-10651.html

 

Personally I see this as a good thing. They finally have an engineer as CEO and they have access to design tech that will help them catch back up to AMD because, in the long run the consumers are the ones who benefit from healthy competition.

[minibois]

Huh, a lot of people sort of ridiculed that hedge fund's recommendations, but Intel actually did it (of course they had this in the works far before it was suggested to the last week).

 

Let's hope they will be able to scale with the demand of their CPU's and of course let's hope the product will perform well!

[TrigrH]

if this is true, must be paying double what apple is for TSMC to even consider it.

[Arika]

great....now that means TSMC controls pretty much all desktop grade CPU manufacturing...that's not good.

[Master Disaster]

11 minutes ago, Arika S said:

great....now that means TSMC controls pretty much all desktop grade CPU manufacturing...that's not good.

Controls is a strong statement. They simply produce the designs they are given by third parties.

 

If you're the best in the business then it makes sense that everyone wants to use your facilities.

 

21 minutes ago, minibois said:

Huh, a lot of people sort of ridiculed that hedge fund's recommendations, but Intel actually did it (of course they had this in the works far before it was suggested to the last week).

 

Let's hope they will be able to scale with the demand of their CPU's and of course let's hope the product will perform well!

I almost wonder if the hedge fund had insider information about the deal and wrote that letter to try and look clever? It's pretty coincidental that they would suggest the exact thing that happened a week before it did.

[thexzenon]

Nice move from Intel, I wasn't expecting them to someone else's node. However, I'm not too excited about the shortages this move will probably lead to

 

[Soppro]

On first impression I'm skeptical and highly doubt this, but who knows I guess it could be true?

[Master Disaster]

One thing that I've just realised, this means that for an entire year we will have I3s on 5nm and I5s/I7s on 14nm++++++

[porina]

39 minutes ago, Master Disaster said:

We heard rumours about this last week and it seems like Trendforce has now confirmed the news.

No, this is still rumour. However tempting it might be to take it on face value, it isn't official until Intel and/or the fabs confirm it. For the purposes of this thread I'll respond assuming it is true.

 

39 minutes ago, Master Disaster said:

moving to TSMC will allow Intels engineers to take advantage on production tech they their own fabs don't have access too (such as chiplet designs).

Going chiplet is an architecture design decision, and in itself doesn't require any specific fab technology. Intel already has their own EMIB for physical interconnectivity and have already made Lakefield as a chiplet constructed product offering.

 

39 minutes ago, Master Disaster said:

Personally I see this as a good thing. They finally have an engineer as CEO and they have access to design tech that will help them catch back up to AMD because, in the long run the consumers are the ones who benefit from healthy competition.

The new CEO wont make any visible impact for years to come. If this decision has been made, it is on the current outgoing CEO. Once again, Intel has not been lacking the architecture design, only the ability to produce it. That's what this apparent move is about. It seems a logical step to de-risk Intel's future activities. TSMC might be on a roll at the moment, but only a fool would expect them to execute well indefinitely. You can't rule out they might encounter unexpected problems in future. Intel having both internal and external resource means at worse they'll have reduced supply if either side has problems, rather than risk all or nothing that companies that solely depend on TSMC will be exposed to.

 

30 minutes ago, minibois said:

Huh, a lot of people sort of ridiculed that hedge fund's recommendations, but Intel actually did it (of course they had this in the works far before it was suggested to the last week).

No, the hedge fund was asking Intel to ditch their fabs totally. This is not even close to that, but merely a bigger expansion of their existing partnership with external fabs for wider product coverage.

 

29 minutes ago, TrigrH said:

if this is true, must be paying double what apple is for TSMC to even consider it.

If that is in reference to Apple currently taking most of TSMC's 5nm capacity, do keep in mind that it will be best part of a year after 5nm introduction. TSMC would likely have been upgrading their 5nm capacity and will have more going forwards. Apple has deep enough pockets to see off Intel, but I think if there is any capacity contrastrint, the risk will fall to other smaller players like AMD.

[TrigrH]

1 minute ago, porina said:

If that is in reference to Apple currently taking most of TSMC's 5nm capacity, do keep in mind that it will be best part of a year after 5nm introduction. TSMC would likely have been upgrading their 5nm capacity and will have more going forwards. Apple has deep enough pockets to see off Intel, but I think if there is any capacity contrastrint, the risk will fall to other smaller players like AMD.

Unlike basically everyone else, Intel is a direct competitor of TSMC. Its not exactly in TSMC's best interest to feed its competition unless its actually worthwhile. If I was "TSMC" I wouldn't sell fab space to intel unless the price was doubled. 

[Master Disaster]

2 minutes ago, porina said:

No, this is still rumour. However tempting it might be to take it on face value, it isn't official until Intel and/or the fabs confirm it. For the purposes of this thread I'll respond assuming it is true.

Fair point however the wording in the article seems to be statemented rather than speculative but yes, until Intel and/or TSMC confirm I guess its still rumour. I'll update the OP to reflect this

2 minutes ago, porina said:

 

Going chiplet is an architecture design decision, and in itself doesn't require any specific fab technology. Intel already has their own EMIB for physical interconnectivity and have already made Lakefield as a chiplet constructed product offering.

Sure and I think this stems from a lack of clarification on my part. I meant that Intel now have access to a smaller process node in which they can put their designs to better use. I'm suffering from morning brain this morning.

2 minutes ago, porina said:

 

The new CEO wont make any visible impact for years to come. If this decision has been made, it is on the current outgoing CEO. Once again, Intel has not been lacking the architecture design, only the ability to produce it. That's what this apparent move is about. It seems a logical step to de-risk Intel's future activities. TSMC might be on a roll at the moment, but only a fool would expect them to execute well indefinitely. You can't rule out they might encounter unexpected problems in future. Intel having both internal and external resource means at worse they'll have reduced supply if either side has problems, rather than risk all or nothing that companies that solely depend on TSMC will be exposed to.

I still think its better to have an engineer steering the ship of a tech company over a financial officer even if it will take a few years for any impact to be seen.

[porina]

1 minute ago, TrigrH said:

Unlike basically everyone else, Intel is a direct competitor of TSMC. Its not exactly in TSMC's best interest to feed its competition unless its actually worthwhile. If I was "TSMC" I wouldn't sell fab space to intel unless the price was doubled. 

It's a horrible word, but I believe this is called "coopetition". You can simultaneously compete and work with other companies. What TSMC has previously said was that they weren't interested in providing short term capacity to Intel at the expense of existing customers. If we take it that TSMC are actually going to offer significant capacity to Intel, it may be more of a longer term deal that is being made.

[wamred]

Finally! 

[leadeater]

2 hours ago, porina said:

Apple has deep enough pockets to see off Intel, but I think if there is any capacity contrastrint, the risk will fall to other smaller players like AMD.

Agree with everything other than this, AMD is TSMC biggest partner currently so it's not quite correct to be calling them a smaller player. Apple as it does in the past helps fund and develop the leading edge node with TSMC which gives them first access, something I'm sure TSMC highly appreciates but I wouldn't categorize it more so than AMD's partnership.

 

The big 5 TSMC customers, which include Apple and AMD, all historically had equal(ish) share of their 7nm node of 20%. All other customers were the left overs from these 5. With Apple moving to 5nm their allocation has been given to AMD and TSMC has also increased wafers per month from 110,000 to 140,000 with that 30,000 increase having gone directly to AMD. So once Apple is no longer using any 7nm AMD will account for 52,000 wafers per month of the 140,000 or ~37% (of 7nm).

[CarlBar]

4 minutes ago, leadeater said:

Agree with everything other than this, AMD is TSMC biggest partner currently so it's not quite correct to be calling them a smaller player. Apple as it does in the past helps fund and develop the leading edge node with TSMC which gives them first access, something I'm sure TSMC highly appreciates but I wouldn't categorize it more so than AMD's partnership.

 

The big 5 TSMC customers, which include Apple and AMD, all historically had equal(ish) share of their 7nm node of 20%. All other customers were the left overs from these 5. With Apple moving to 5nm their allocation has been given to AMD and TSMC has also increased wafers per month from 110,000 to 140,000 with that 30,000 increase having gone directly to AMD. So once Apple is no longer using any 7nm AMD will account for 52,000 wafers per month of the 140,000 or ~37% (of 7nm).

 

Agreed, the last thing TSMC wants is to be constrained to one other company. They're not going to let one player put the other out of business generally, it hurts them in the long run too much.

[porina]

5 minutes ago, leadeater said:

Agree with everything other than this, AMD is TSMC biggest partner currently so it's not quite correct to be calling them a smaller player.

Thanks for the correction. I don't follow TSMC to that level of detail so it is interesting to see those numbers. When talking about relative size, I was thinking more of the overall company size, rather than how closely they were working with TSMC, so that is a mismatch on my part.

 

The wafers per month, is that total or for a particular process? I wonder how much 5nm capacity they have vs 7nm (in general, I know there are variations to the processes).

[ne0tic]

3 minutes ago, leadeater said:

Agree with everything other than this, AMD is TSMC biggest partner currently so it's not quite correct to be calling them a smaller player. Apple as it does in the past helps fund and develop the leading edge node with TSMC which gives them first access, something I'm sure TSMC highly appreciates but I wouldn't categorize it more so than AMD's partnership.

 

The big 5 TSMC customers, which include Apple and AMD, all historically had equal(ish) share of their 7nm node of 20%. All other customers were the left overs from these 5. With Apple moving to 5nm their allocation has been given to AMD and TSMC has also increased wafers per month from 110,000 to 140,000 with that 30,000 increase having gone directly to AMD. So once Apple is no longer using any 7nm AMD will account for 52,000 wafers per month of the 140,000 or ~37% (of 7nm).

True. AMD uses a bigger chunk of TSMC's capacity than what Apple does although Apple is still the bigger company for TSMC in terms of revenue (since Apple uses much more advanced and expensive nodes than AMD). 

[leadeater]

10 minutes ago, porina said:

The wafers per month, is that total or for a particular process? I wonder how much 5nm capacity they have vs 7nm (in general, I know there are variations to the processes).

Yes that was just for 7nm, I haven't actually looked at what their 5nm capacity is if that has even been disclosed. I would assume Apple asked for the same number of wafers per month as they were for 7nm which would actually give them an increase on product output, more chips per wafer. Would also assume the cost for that 5nm capacity is greater than what they were paying for 7nm too.

 

9 minutes ago, ne0tic said:

True. AMD uses a bigger chunk of TSMC's capacity than what Apple does although Apple is still the bigger company for TSMC in terms of revenue (since Apple uses much more advanced and expensive nodes than AMD).

Well that depends, when they were all on 7nm Apple had a very slightly higher capacity than the other 4 but not by much. 5nm cost would have to be significantly higher than 7nm with Apple asking for equal number of wafers per month as before to surpass AMD now. What AMD is using now in 7nm would be before the capacity increase to 140k per month 47% of 7nm.

 

So my question would have to be is the cost of 5nm 2.4 times that of 7nm and is Apple paying for the same number of wafers per month on 5nm as they were on 7nm, that is now the only way Apple could be higher than AMD on revenue share for TSMC. Doesn't seem likely to me or your nice new iPhones and MacBook/Mac Mini would be hellishly expensive compared to last gen models, which they aren't.

[Taf the Ghost]

18 minutes ago, leadeater said:

Agree with everything other than this, AMD is TSMC biggest partner currently so it's not quite correct to be calling them a smaller player. Apple as it does in the past helps fund and develop the leading edge node with TSMC which gives them first access, something I'm sure TSMC highly appreciates but I wouldn't categorize it more so than AMD's partnership.

 

The big 5 TSMC customers, which include Apple and AMD, all historically had equal(ish) share of their 7nm node of 20%. All other customers were the left overs from these 5. With Apple moving to 5nm their allocation has been given to AMD and TSMC has also increased wafers per month from 110,000 to 140,000 with that 30,000 increase having gone directly to AMD. So once Apple is no longer using any 7nm AMD will account for 52,000 wafers per month of the 140,000 or ~37% (of 7nm).

AMD will still be Wafer constrained. Kind of nuts how much capacity AMD is using now.

[leadeater]

@porina @ne0tic

 

Ok did some more digging, Apple probably is a bit larger revenue share still. TSMC 5nm is currently 100k wafers per month (or is 80k and will be 100k, but think it is 100k now) and the Apple M1 accounts for 25% of that by itself. There are reports of Apple shifting that to Samsung 5nm though, so I guess TSMC 5nm is already capacity constrained to be thinking about that. Note I do not and never did believe Apple was given 100% of TSMC's 5nm capacity as there are others (not AMD, well likely have contract but for later) wanting that now and I believe have contracts for it.

 

So pulling number out of my ass Apple probably has 50% to 70% (max) of TSMC 5nm capacity, which would have them above AMD still.

[ne0tic]

4 minutes ago, leadeater said:

Well that depends, when they were all on 7nm Apple had a very slightly higher capacity than the other 4 but not by much. 5nm cost would have to be significantly higher than 7nm with Apple asking for equal number of wafers per month as before to surpass AMD now. What AMD is using now in 7nm would be before the capacity increase to 140k per month 47% of 7nm.

 

So my question would have to be is the cost of 5nm 2.4 times that of 7nm and is Apple paying for the same number of wafers per month on 5nm as they were on 7nm, that is now the only way Apple could be higher than AMD on revenue share for TSMC. Doesn't seem likely to me or your nice new iPhones and MacBook/Mac Mini would be hellishly expensive compared to last gen models, which they aren't.

TSMC 5nm is supposedly about 1.85x the price of 7nm. Keep in mind that Apple still got 7nm capacity as well for chips in Apple Watches, AirPods, iPads and some other stuff. Let us just say they are about the same size in terms of revenue for TSMC, probably shifting depending on quarters and product releases. 

[leadeater]

2 minutes ago, ne0tic said:

TSMC 5nm is supposedly about 1.85x the price of 7nm. Keep in mind that Apple still got 7nm capacity as well for chips in Apple Watches, AirPods, iPads and some other stuff. Let us just say they are about the same size in terms of revenue for TSMC, probably shifting depending on quarters and product releases. 

As per my above post, RIP Intel if the M1 accounts for that much 5nm production. That's all product orders from Apple that Intel are no longer getting, ouch. Also with both Apple and AMD actually increasing their wafer capacity usage the total number of down stream chip products has massively increased then, by A LOT.

[ne0tic]

9 minutes ago, leadeater said:

As per my above post, RIP Intel if the M1 accounts for that much 5nm production. That's all product orders from Apple that Intel are no longer getting, ouch. Also with both Apple and AMD actually increasing their wafer capacity usage the total number of down stream chip products has massively increased then, by A LOT.

Yeah, I don't really see how there would be enough capacity for Intel this year, unless it's just a few low volume chips. Do you know if N5P are completely new wafers or the same ones but just updated/redesigned? Since Apple are moving to N5P later this year with their upcoming A15 chip. If N5P are seperate wafers then that would definitely free up some N5 capacity. 

[StDragon]

24 minutes ago, leadeater said:

Also with both Apple and AMD actually increasing their wafer capacity usage the total number of down stream chip products has massively increased then, by A LOT.

Yeah, when AMD went the direction of chiplet that consumed more wafers to produce the chips. 

[RejZoR]

2 minutes ago, StDragon said:

Yeah, when AMD went the direction of chiplet that consumed more wafers to produce the chips. 

Not really. You may look at it that you need more waffer surface area to achieve same results, but you need to throw away far less surface area of it in the end, resulting in better usability of the waffer surface area vs massive monolithic processors. So, when you draw a line, it's more efficient to churn out tons of tiny chiplets and "glue" them together than making way less massive chips, throw away 1/4 or 1/3 of them during the process.