Intel is reborn from the ashes, can it threaten TSMC?

Intel, a veteran chip manufacturer in the United States, has invested US$20 billion in plans to build two foundries with 7-nanometer production capacity in Arizona, and its CEO, Pat Gelsinger (Pat Gelsinger) ) Also released the IDM2.0 strategic plan on March 24, local time. On the one hand, it announced that it will separate the chip manufacturing part and open up production capacity to provide foundry services, and on the other hand, it will expand the foundry of other factories that design chips. Range, such as TSMC, Samsung, etc.

Intel built two foundry plants with 7nm process production capacity in Arizona, USA, and announced the IDM2.0 strategic plan to split the company’s business into chip design and foundry. (Visual China)

This can be interpreted as Intel’s reorganization of its company, splitting its business into two parts: chip design and foundry. In the past, Intel’s vertically integrated manufacturing model (IDM) was to completely hand over its own design of chips to its own fabs and never outsource to other factories. Today, South Korea’s Samsung still adopts this model. Intel’s approach is not a pioneering work in the semiconductor industry. In 2009, Chaowei (AMD) also split its wafer manufacturing department and handed over its designed CPU to TSMC’s foundry.

The strong cooperation shared Intel’s Market share has become a strong competitor in the chip design market; however, the split-up foundry company GlobalFoundries has had a hard time, with consecutive revenue losses, limited process development capabilities, and acquisition of technology through mergers and cooperation. It was defeated in competition with TSMC, Samsung and other companies and stopped at the 12-nanometer process. This also reflects that the separation of chip design and foundry is still a major trend under the consideration of maximizing economic benefits.

Intel recently broke through the extreme ultraviolet (EUV)-based 7-nanometer process. Its addition has made the foundry market more crowded. Intel’s advantages are roughly as follows: 1. Intel’s chip design department will still try its best Let the foundry department produce for it, and the foundry department will seek third-party production such as TSMC and Samsung if it can’t do it.

In other words, the biggest customer of Intel’s foundry department is actually its own design department, which is inherently golden. ; 2. Intel’s foundries are mostly located in the United States and Europe, and its foundry customers such as Microsoft, IBM, Cisco and Ericsson are also located in two places, closer to customers, and communication is better than in TSMC and Samsung in the Asian region have even more advantages.

Third, the expansion of production capacity and foundry in the United States is in the national interest of the US government. US Treasury Secretary Janet Yellen has also stated that wafer manufacturing is for the United States An important part of the national strategy, Intel’s foundry department is expected to receive strong policy support, such as finance, material resources and manpower.

Of course, Intel also has its disadvantages. First of all, in the past, the foundry department mainly served internal customers. It is not easy to change to mainly serve external customers. Liu Peizhen, a researcher at the Taiwan Economic Research Institute, also pointed out that Intel is not used to the external service model; secondly, in terms of foundry costs, the United States Higher than the Asian region, this is not good for Intel to gain a competitive advantage in price, which is also the main reason why the chip generation industry mainly flows to the Asian region; third, its potential customers are mostly direct competitors of Intel, such as AMD and NVIDIA (NVIDIA ), Qualcomm, etc., and most external customers use ARM-based chip architecture.

Intel’s foundry department used to work for its own X86 architecture, and may not be able to accept it well; Intel’s process has just broken through 7nm, lagging behind TSMC and Samsung, which are already capable of mass production of 5nm. It is difficult to win over customers such as Apple and Qualcomm who need to use the most advanced processes. This will also restrict Intel’s continued development of advanced processes. ability.

Looking at Intel’s current business restructuring, it is still focused on maintaining the core chip design business, hoping to use better third-party manufacturing processes to keep its products competitive and maintain its leading position in the industry. After the spin-off of the foundry department, it will help Intel reduce costs as a whole. The foundry department will let it grow on its own, gaining orders with its 7-nanometer process, looking for more business opportunities, and with the support of the U.S. government’s policies, it will be self-sustaining. The risk of extinction is also quite low. Generally speaking, the market recognizes Intel’s business restructuring in the short term, but the long-term situation obviously depends on Intel’s own performance.

Both the design department and the foundry department still have their own markets to face. The competitive environment. The biggest beneficiary of Intel’s business reorganization is ASML (ASML). Intel’s increase in capital investment in the foundry sector means that they will buy more Asmer’s lithography machines, which will help Asmer is more effective in realizing customer diversification, and TSMC and Samsung will certainly invest more in advanced manufacturing processes in order to maintain their market positions, which will also benefit them.

For TSMC, Intel’s business restructuring is a mixed blessing. The positive side is that it is expected to receive orders for new products from Intel in the short term. The other side is that there is one more potential strong competitor in the market. () For Taiwan’s semiconductor industry, especially TSMC, Intel’s business restructuring is a mix of good and bad news. The good news is that TSMC is expected to get new products from Intel in the short term that require high-end manufacturing processes. Orders, the worrying side is that there is one more potential strong competitor in the market, although Intel has more possibilities to become a second-tier opponent like GF or SMIC.

TSMC has the technological advantages it has invested over the years, its advanced manufacturing process has a strong moat, and the customer relationship it has won from its foundry business for a long time. However, its biggest threat lies in the intensified technological war between the US and China in the external environment, how to keep the largest orders The internal environment lies in how to deal with the Taiwanese government’s intervening in its business from time to time, and Taiwan’s current water shortage and power shortage crisis. Source: Hong Kong Economic Times