The chip giant is targeting customers who need low-cost, mature manufacturing nodes.
Major semiconductor company intel (INTC 2.23%) is focused on regaining the manufacturing lead TSMC At the same time, we are building our own foundry business. The company is in the process of bringing his five new advanced manufacturing nodes into mass production within four years. That effort culminated in the Intel 20A process and Intel 18A process, both of which he expects to be completed by the end of 2024.
These new cutting-edge processes will be needed for Intel to convince chip designers to use its foundries to make ultra-fast, ultra-efficient chips that power smartphones and other devices. . However, there are some types of chips that don't benefit from the latest and greatest manufacturing processes. Instead, you need mature, inexpensive processes that can deliver adequate performance and efficiency while keeping costs down.
Get third-party support
That's where Intel's Intel 16 manufacturing process comes into play. Intel 16 is a rebalanced version of the mature node that Intel started using in his 2018, optimized for low cost and low power chips. MediaTek, which designs a variety of chips that go into 2 billion devices each year, last year entered into a deal with Intel to bring some of those chips to Intel's foundries using the Intel 16 process. announced a partnership.
The Intel 16 process was scheduled to enter initial volume production early this year, but one of the missing pieces of the puzzle was support for third-party chip design tools. Intel uses proprietary tools in-house, but potential customers use third-party alternatives to design their chips.Tuesday's series of press releases from ansis, cadenceSiemens, and synopsisAll major providers of chip design tools bring official support for these tools to the Intel 16 process.
These three companies' tools are officially certified for use with the Intel 16 process, allowing chip designers who use these tools to choose Intel to manufacture their chips. While it may be more profitable to make chips with cutting-edge processes, mature nodes still present big opportunities for Intel.
Even in the first quarter of 2023, foundry market leader TSMC still derived about half of its revenue from chips using pre-16nm technology. Intel he is attacking his TSMC on two fronts. Our goal is to aggressively launch new advanced nodes to reach customers who require modern manufacturing processes, and to provide an alternative to TSMC customers who require lower-cost manufacturing solutions.
Steady progress towards a multi-billion dollar business
According to , the semiconductor foundry services industry generated revenue of $130.5 billion in 2022. gartner. TSMC scooped up more than half of that revenue.
Although Intel's foundry business currently doesn't generate much external revenue, the company is laying the groundwork to become a major player in the industry this decade. The mature Intel 16 process is now ready to go live with strong third-party support, and if all goes to plan, Intel has the opportunity to regain manufacturing leadership by the end of 2024.
Intel aims to be the second-largest foundry by 2030, as measured by external revenue. this is, samsung And the market share is approaching 20%. If Intel is successful, it will generate well over $20 billion in annual revenue, adding to Intel's revenue.
A lot can still go wrong. Intel has long been notorious for manufacturing delays related to its products, and its legacy is certainly something to consider for potential customers. However, Intel is so far on track to launch new nodes on schedule, and the mature Intel 16 node provides chip designers with a solid low-cost alternative to his TSMC.
Check back in a few years. Intel's foundry business may be well on its way to becoming number two in the industry.
Editor's note: This article has been updated. Siemens' Caliber platform was also certified with Intel 16 process technology by IFS.
Timothy Green has a position at Inter. The Motley Fool has positions in and recommends Cadence Design Systems, Synopsys, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Ansys, Gartner, and Intel and recommends the following options: A long January 2023 $57.50 call on Intel and a long January 2025 $45 call on Intel. The Motley Fool has a disclosure policy.
