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Intel Considering Outsourcing Chip Production to TSMC and Samsung

Intel has recently spoken to Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. regarding the possibility of outsourcing the production of some of its most premium chips to these companies. No deal has been formalized yet and reports indicate the fact Intel is still hoping for a turnaround as far as its production capabilities are concerned.

Intel has been facing delays in its processes of chip fabrication and that is one of the reasons that has compelled them to consider collaborating with other companies to facilitate the production of chips. Though Intel is still silent about its plans, sources close to the company state that the California-based company is thinking of outsourcing as a serious option. However, even if an agreement is drawn between Intel and TSMC or Samsung, it would take a long time for the dealings to happen between the two companies.

If Intel decides to procure some components from Taiwan, it would have to wait till 2023 as that is when the components are expected to arrive in the market. The process could get further delayed depending on the already established manufacturing processes between TSMC/Samsung and the companies that it outsources its services.

Under Jim Keller’s leadership, the designers at Intel walked towards a more modular technique of creating microprocessors. Both the process of manufacturing chips in-house or getting the work outsourced becomes easier and more flexible because of this.

The problem began when Keller resigned from Intel last year leaving a lot of people, who were dependent on his leadership, on how to go about this process. This gave competitors like Apple Inc. and Advanced Micro Devices Inc. the opportunity to make a move and collaborate with other companies to accelerate or improve their production processes.

The intense competitive pressure forced Intel to think of ways in which they could give a boost to their production facilities.

Along with technological change, one has witnessed significant growth in the chip industry in recent times. There was a time when most companies adhered to traditional methods like contracting and jamming more number of transistors into each of the several packages. Now, many companies have gotten used to implementing more modern techniques like integrating memory components and stacking processors into single chips. Many organizations have also brought in customized designs for processes like artificial intelligence.

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