Tag: Intel Foundry

  • Intel Foundry Targets Breakeven by 2027

    Intel Foundry Targets Breakeven by 2027

    Key Takeaways

    1. Intel Foundry is losing billions each quarter while working to increase capacity and innovate technologies, aiming for breakeven by 2027.
    2. The first product using the new 18A technology, the Panther Lake CPU, will be released in late 2025, with plans to transition other series to this technology.
    3. Demand for chips from external clients is currently low, but Intel plans to utilize early 18A wafers for its own products to improve profitability.
    4. To achieve breakeven, Intel needs to generate low- to mid-single-digit billions in annual revenue from external wafers, supplemented by advanced packaging and partnerships.
    5. Intel plans to produce more premium client silicon internally, including the Nova Lake CPU, to enhance cost discipline and maximize capacity.

    Intel Foundry is continuing to lose “billions each quarter” as it works on increasing its capacity and innovating new technologies. During a talk at J.P. Morgan’s Global Technology, Media & Communications Conference, CFO Zinsner mentioned that they aim to reach breakeven by “sometime in 2027,” which is a timeline the company hinted at earlier this year.

    Upcoming Products and Technology

    The first product based on the new 18A technology, a client CPU known as Panther Lake, is set to be released in late 2025. Additionally, Intel plans to transition the Clearwater Forest Xeon series and some third-party designs to this same technology node. Management sees the 18A as a way to convince clients to embrace its next versions, 18A-P and 14A.

    Demand and Strategy

    Currently, the demand from outside sources is limited. Many potential clients are still testing chips, and Zinsner admitted that the “committed volume is not significant.” To counterbalance this, Intel is counting on its own products to use up most of the early 18A wafers, thereby enhancing fab utilization and profitability.

    To reach their breakeven goal, Intel needs to generate only “low- to mid-single-digit billions” in annual revenue from external wafers. This will be supplemented by advanced packaging, production of mature-node output like Intel 16, and collaborations with partners such as UMC and Tower. The use of High-NA EUV for 14A will increase costs at first, but Intel is confident that the improvements in density and performance will make the initial expenses worthwhile.

    Internal Production Plans

    Intel also intends to produce more of its premium client silicon internally. The new Nova Lake CPU, which is based on 18A-P, will be added to the internal production alongside Panther Lake. Zinsner believes that having Foundry “compete” for these wafers under the company’s smart-capital model will enhance cost discipline while maximizing capacity, which should improve margins even before large external orders come in.

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  • Samsung and Apple Rumored to Acquire Intel

    Samsung and Apple Rumored to Acquire Intel

    Earlier this month, news surfaced that Qualcomm was considering acquiring Intel due to its disappointing performance. The company reportedly missed out on a multi-billion dollar deal with PlayStation. The underwhelming Arrow Lake launch and the cancellation of certain architectures may have further complicated matters for the chip giant. Now, according to Moore’s Law is Dead, referencing industry insiders, it seems other companies have shown interest in Intel too.

    Potential Buyers for Intel

    Apple and Samsung are two firms that are rumored to be interested in merging with or acquiring Intel. Tom suggests that both companies might be targeting Intel for its foundry services. This strategy could help Apple lessen its dependency on TSMC for high-end chips. Moreover, producing chips within the US would be a significant advantage. However, this plan could be thwarted if Intel opts to spin off its foundry division into a distinct entity.

    Samsung’s Strategic Interest

    In a similar vein, Samsung could leverage Intel Foundry’s intellectual property to enhance its own manufacturing capabilities. Recent reports indicate that Samsung Foundry’s latest nodes are struggling, with yields as low as 20% on its cutting-edge 3GAP process. While it’s possible that this figure has improved, it’s still not at a commercially viable level, as seen in the delays or possible cancellations surrounding the Exynos 2500.

    Caution Advised

    As always, these discussions should be regarded as mere speculation until more evidence emerges. Additionally, Intel has recently collaborated with AMD to create the x86 EAG. Furthermore, it has secured significant contracts from the United States Department of Defense for military-grade chips, along with Amazon Web Services as a client for Intel 18A. This could provide Intel with the financial boost it needs to remain operational in the short term.

    Despite some setbacks in the desktop sector, Intel has seen success with Lunar Lake, and the Arrow Lake laptop is also appearing to be quite competitive. Looking ahead, Panther Lake, set to release next year, has the potential to challenge Apple in terms of performance-per-watt, thanks to improvements in 18A like RibbonFET and backside power delivery.

    Moore’s Law is Dead on YouTube.

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