Intel has turned to Taiwan Semiconductor Manufacturing Co. (TSMC) for its most advanced chip production, as the U.S. company struggles to compete in the high-stakes semiconductor foundry market. Intel’s recent decision to entrust all processes below 3 nanometers to TSMC underscores the challenges it faces in ramping up its own manufacturing capabilities.
TSMC’s established leadership in sub-7 nanometer technology and longstanding relationships with major players like Broadcom have made it a critical partner for Intel, particularly as its own foundry business reports steep losses. In its latest quarter, Intel’s foundry operations posted a $2.8 billion loss, with profitability undermined by delays and high production costs at its Intel 3 and Intel 4 facilities.
While Intel continues to push its IDM 2.0 strategy and recently launched its 18A process design kit, clients remain skeptical. Broadcom, a key customer, has voiced concerns over Intel’s ability to mass-produce chips using its 18A process, reinforcing the company’s reliance on TSMC for high-volume, cutting-edge production.
As Intel reduces costs and scales back global expansion, its dependency on TSMC highlights the increasing importance of the Taiwanese chipmaker, which has become a dominant force in the advanced semiconductor sector.
