Intel looking to 'avoid fighting' with Apple for TSMC's 3nm chip production

Posted:
in General Discussion edited December 2021
A new report says that Intel executives are shortly to visit chip company TSMC, specifically to discuss the company's production capacity for 3nm processors.

Intel
Intel


Backing up previous claims that Intel is considering outsourcing production to TSMC, a new report says that a meeting is to happen in the next few weeks.

"High-level executives of Intel will pay a visit to Taiwan in mid-December," says a brief report in Digitimes, "and meet TSMC to discuss the US vendor's demanded 3nm chip capacity, according to industry sources."

Earlier reports said that Intel was considering the outsourcing, but still hoped to improve its own manufacturing capabilities.

The meeting is said to help Intel "avoid fighting with Apple" for manufacturing capacity. Presumably, this is about scheduling the runs, so TSMC won't be trying to crank out Intel processors at the same time it is producing chips for a future iPhone, but it isn't clear in the report what will be discussed to prevent that.

Separately, TSMC has begun the next stage of pilot production of 3nm processors for Apple. Devices utilizing the chips are not expected until early 2023, which is likely to be the earliest that Intel could see production too.

Digitimes has a poor track record as it pertains to Apple's future plans. It has but a much better one regarding information about Apple's suppliers. Friday's report is more of the latter than the former.

Read on AppleInsider
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Comments

  • Reply 1 of 30
    Picture you're TSMC.

    Apple has been using TSMC to produce their Apple Silicon chips for the better part of a decade. They help finance development of new cutting edge nodes, and have been a critical partner in TSMC's advancement and evolution into the world's best (and possibly largest) fab.

    At first, TSMC was reluctant to take on Apple's business because they didn't want to put so many of their eggs into such a large basket, but eventually the two got together and have been working with each other ever since. Apple likes doing business with TSMC because they not a competitor, and their IP won't accidentally leak into some other subdivision's competing products.

    Now, along comes this new Johnny-Come-Lately with a fist full of dollars and wants you to produce their CPUs while they're upgrading their own fab to more modern standards.

    Do you go with with Intel for the fast cash grab, of stick with the partner who's been working with you all this time?

    Of course, when Intel gets their own fabs up to snuff, you know you'll suffer the double whammy of losing not only the business of fabricating Intel CPUs, but Intel will then try to take as many of your other customers as they can.

    What's a body to do ... ?
    scstrrfGabykurai_kagewilliamlondonseanjviclauyyctmay
  • Reply 2 of 30
    crowleycrowley Posts: 9,315member
    Picture you're TSMC.

    Apple has been using TSMC to produce their Apple Silicon chips for the better part of a decade. They help finance development of new cutting edge nodes, and have been a critical partner in TSMC's advancement and evolution into the world's best (and possibly largest) fab.

    At first, TSMC was reluctant to take on Apple's business because they didn't want to put so many of their eggs into such a large basket, but eventually the two got together and have been working with each other ever since. Apple likes doing business with TSMC because they not a competitor, and their IP won't accidentally leak into some other subdivision's competing products.

    Now, along comes this new Johnny-Come-Lately with a fist full of dollars and wants you to produce their CPUs while they're upgrading their own fab to more modern standards.

    Do you go with with Intel for the fast cash grab, of stick with the partner who's been working with you all this time?

    Of course, when Intel gets their own fabs up to snuff, you know you'll suffer the double whammy of losing not only the business of fabricating Intel CPUs, but Intel will then try to take as many of your other customers as they can.

    What's a body to do ... ?
    If/when Intel open a competitive foundry business they'll try to take TSMC's customers whether TSMC work with them now or not.
    dewme
  • Reply 3 of 30
    red oakred oak Posts: 917member
    Intel executives are a weak bunch.   They did not even visit yet and already (likely) leaked it 
    viclauyyc
  • Reply 4 of 30
    crowley said:

    Of course, when Intel gets their own fabs up to snuff, you know you'll suffer the double whammy of losing not only the business of fabricating Intel CPUs, but Intel will then try to take as many of your other customers as they can.

    What's a body to do ... ?
    If/when Intel open a competitive foundry business they'll try to take TSMC's customers whether TSMC work with them now or not.
    Exactly.  But given the silicon supply problems, and the ever increasing demand for chips of all types for all manner of things, from ear buds to cars to home automation to rockets, there will likely be no shortage of customers for either of them, or for any others that spring up.
    scout6900
  • Reply 5 of 30
    BeatsBeats Posts: 2,683member
    Picture you're TSMC.

    Apple has been using TSMC to produce their Apple Silicon chips for the better part of a decade. They help finance development of new cutting edge nodes, and have been a critical partner in TSMC's advancement and evolution into the world's best (and possibly largest) fab.

    At first, TSMC was reluctant to take on Apple's business because they didn't want to put so many of their eggs into such a large basket, but eventually the two got together and have been working with each other ever since. Apple likes doing business with TSMC because they not a competitor, and their IP won't accidentally leak into some other subdivision's competing products.

    Now, along comes this new Johnny-Come-Lately with a fist full of dollars and wants you to produce their CPUs while they're upgrading their own fab to more modern standards.

    Do you go with with Intel for the fast cash grab, of stick with the partner who's been working with you all this time?

    Of course, when Intel gets their own fabs up to snuff, you know you'll suffer the double whammy of losing not only the business of fabricating Intel CPUs, but Intel will then try to take as many of your other customers as they can.

    What's a body to do ... ?

    Don’t underestimate corporate greed.
    Here’s 2 companies that did something similar and stepped on Apple’s toes:
    Google
    Samsung

    Luckily, TSMC hasn’t put knockoff Apple products on the market but nothing is protected or off limits anymore.
    scout6900baconstangwilliamlondonviclauyyc
  • Reply 6 of 30
    lkrupplkrupp Posts: 9,709member
    So Intel finally admits it has failed miserably in producing modern chips and now wants to turn to Apple’s supplier. Talk about schadenfreud for Apple, who is probably smiling like the Cheshire Cat. Samsung has announced a plan to build massive foundry in Texas. TSMC should do the same and put the final nail in Intel’s coffin.
    scout6900baconstangwilliamlondonseanj
  • Reply 7 of 30
    I don't think Apple has much to worry about with TSMC and Intel. Apple does a good job with their supply chain. I'm sure Apple has a contract with TSMC for so many units and escalator clause if a needed increase of production is required. Intel can't cut in on that.
    scout6900baconstangseanjviclauyycigorsky
  • Reply 8 of 30
    This is rich.  Intel is cranking out low-end processors for Chromebooks, either ignoring or flailing at next-gen SoC, and has to go - hat in hand - to their main competitor for technology and capacity.  Their SoC efforts have been mostly with existing processor designs and if you go looking for them it's for NUCs and Atom for mobile running on 14nm.  TSMC has been planning expansion before these guys came calling, I think they'll be fine letting Intel do what they can to compete on their own.  If they put in half the effort Apple has to get their A and M families to where they are, Intel should be fine.  But continuing their "good enough" approach may keep them in sales for a while, but it's not the look of progress they like to project.  Beyond that, they're at the mercy of device makers - if someone can do with licensable ARM what Apple has done, end-user manufacturers will go where they can make the most noise with the best claims.  Being a consultant for Intel will be highly lucrative for the next two years. Then they will either have succeeded in answering Apple/TSMC or they will be chasing them. As a company, they don't have much influence with consumers.  Ask anyone what chip is in the device they're using and you'll get mostly blank stares.  Unless you happen upon an M1 user - they will be happy to tell you. Intel just has never been able to get people excited about their product, and neither has Microsoft.  Well, except for that one time with some guy named Ballmer... Windows is like the joke about Denny's - you don't GO to Denny's, you END UP at Denny's.  That said, Win 11 is looking like the first version that can be sold on its merits - look and feel, speed - rather than "you just need us because we've been here for three decades".
    rezwitsviclauyyclkruppbadmonk
  • Reply 9 of 30
    igorskyigorsky Posts: 603member
    Picture you're TSMC.

    Apple has been using TSMC to produce their Apple Silicon chips for the better part of a decade. They help finance development of new cutting edge nodes, and have been a critical partner in TSMC's advancement and evolution into the world's best (and possibly largest) fab.

    At first, TSMC was reluctant to take on Apple's business because they didn't want to put so many of their eggs into such a large basket, but eventually the two got together and have been working with each other ever since. Apple likes doing business with TSMC because they not a competitor, and their IP won't accidentally leak into some other subdivision's competing products.

    Now, along comes this new Johnny-Come-Lately with a fist full of dollars and wants you to produce their CPUs while they're upgrading their own fab to more modern standards.

    Do you go with with Intel for the fast cash grab, of stick with the partner who's been working with you all this time?

    Of course, when Intel gets their own fabs up to snuff, you know you'll suffer the double whammy of losing not only the business of fabricating Intel CPUs, but Intel will then try to take as many of your other customers as they can.

    What's a body to do ... ?
    If you think that TSMC will in any way even consider risking their business relationship with Apple, you're nuts.
    williamlondonrezwitsseanj
  • Reply 10 of 30
    crowley said:
    If/when Intel open a competitive foundry business they'll try to take TSMC's customers whether TSMC work with them now or not.
    The point is that if Intel wants to muscle out Apple's 3nm capacity, I think they're out of luck.

    TSMC may set up more fab capacity for Intel (if possible), but I think Apple's 3nm capacity is safe.

    Let's hope they've got 3nm working for A16/M3, though if not there's always TSMC's N4P node (which I believe is working).
    williamlondonseanj
  • Reply 11 of 30
    rmoormoo Posts: 30member
    Guys, this isn't a story.
    1. Intel already announced back in 2020 that they were going to use TSMC in 2022 as part of their transition year from 10nm to 7nm. (Technically Intel has been producing CPUs on their 10nm process since 2019, but they only achieved the ability to exceed 4 cores on it in 2021). 
    2. Only GPUs (a new product for Intel), certain Xeon CPUs (that ran into issues with Intel manufacturing them on their 10nm node) and Atom CPUs (their small core CPU that was created for their failed attempt at making smartphone and tablet CPUs ... I have no idea what they are going to be used for, maybe Windows 11 tablets) are going to be manufactured at TSMC. The vast majority of their chips - laptop, desktop and some Xeon - are going to be manufactured on Intel's 10nm node. 
    3. Intel already signed a deal to use TSMC's 6nm and 4nm nodes for this purpose. The first batch of GPUs is already being manufactured on this node: https://www.pcgamer.com/intel-alchemist-gpu-tsmc-6nm-process/ so all that is happening here is Intel's attempt to upgrade from the 4nm node to the 3nm node for the other half of the deal. Why is Intel doing this? Because AMD is very justifiably angry at TSMC for delaying their Zen4 from 4Q2021 to 3Q2022 (which allowed Intel to use Alder Lake to narrow the gap on process size and beat AMD in offering DDR5 and PCIe 5 ) and increasing their prices for the privilege. As a result, AMD is jumping ship to Samsung and their 3nm process: https://wccftech.com/amd-rumored-to-become-samsungs-first-3nm-customer-along-with-65-revenue-growth/

    Now please note that Intel always preferred the 3nm process. TSMC suggested that they use 4nm instead because they intended to serve Apple and AMD first. But now that AMD won't be using TSMC's 3nm capacity, Intel is merely asking TSMC if that provides an opening to use 3nm instead of 4nm. So, Intel is likely asking "what is the maximum number of chips that you can fab for us while still accommodating Apple"? Unlike AMD, Intel doesn't need more than a few million GPUs and Xeon/Atom CPUs ... 10 million max likely. Whatever number TSMC will state that they can offer, Intel will buy.

    That is all that is going on folks. In 2023, Intel will be back to using their foundry exclusively. The only interesting part is that TSMC may have lost AMD to Samsung for good. TSMC is fighting back by trying to get Qualcomm to choose its 3nm node over Samsung's for their flagship SOCs, and Qualcomm is listening to their pitch (no final decision yet). Also, Nvidia was frustrated with yield problems on Samsung's 8nm node - which left them unable to leave AMD in the dust because of TSMC's inability to manufacture enough GPUs for for them - so they are shifting their entire GPU operation to the 5nm and 6nm nodes that Apple and MediaTek are abandoning. However, Intel is aggressively pursuing Qualcomm, Nvidia and Google for their 7nm node starting in 2023. Samsung's new foundry in Texas is basically being built to counteract Intel's new foundries. 

    Now that Samsung has caught up to TSMC - they will actually start mass production on their 3nm node before TSMC will - and Intel narrowing the gap with both (their 7nm is equivalent to TSMC 6nm and Samsung 5nm), the foundry wars begun have they. It is going to be neat to watch.
    scstrrfkurai_kagewilliamlondonrezwitsseanjapplguydewme
  • Reply 12 of 30
    Picture you're TSMC.

    Apple has been using TSMC to produce their Apple Silicon chips for the better part of a decade. They help finance development of new cutting edge nodes, and have been a critical partner in TSMC's advancement and evolution into the world's best (and possibly largest) fab.

    At first, TSMC was reluctant to take on Apple's business because they didn't want to put so many of their eggs into such a large basket, but eventually the two got together and have been working with each other ever since. Apple likes doing business with TSMC because they not a competitor, and their IP won't accidentally leak into some other subdivision's competing products.

    Now, along comes this new Johnny-Come-Lately with a fist full of dollars and wants you to produce their CPUs while they're upgrading their own fab to more modern standards.

    Do you go with with Intel for the fast cash grab, of stick with the partner who's been working with you all this time?

    Of course, when Intel gets their own fabs up to snuff, you know you'll suffer the double whammy of losing not only the business of fabricating Intel CPUs, but Intel will then try to take as many of your other customers as they can.

    What's a body to do ... ?
    That’s no dilemma. You take on as many customers as you can instead of being tied to one.
    williamlondonflydog
  • Reply 13 of 30
    rmoormoo Posts: 30member
    Beats said:

    Don’t underestimate corporate greed.
    Here’s 2 companies that did something similar and stepped on Apple’s toes:
    Google
    Samsung

    Luckily, TSMC hasn’t put knockoff Apple products on the market but nothing is protected or off limits anymore.
    Yeah, and Google and Samsung were so much better off before Android, right? I mean you can't seriously believe that? Before Android, Samsung was known as a second (or third) rate maker of washing machines, refrigerators and air conditioners. Sure they made TVs, audio equipment, DVD and Blu-Ray players etc. but were considered generally inferior to the Japanese, American and European brands. Now Samsung is considered one of the top high tech companies on the planet: the #1 seller of smartphones, the #1 seller of smart TVs, the #2 seller of tablets, their reputation in audio products has vastly improved, and they are even gaining traction as a PC (well, laptop) maker. That is in addition to their non-consumer stuff in IoT, AI, smart cars etc. Without entering and winning the Android race - beating Sony, Philips, Acer, Asus, Dell, HTC, LG, Motorola and several other companies with much better reputations as tech companies in the process - we wouldn't even be talking about Samsung right now. 

    As for Google, they are making 10 times the revenue now that they did in 2011 before Android took off. Not only did Android prevent Microsoft from getting even bigger - without Android, Microsoft's mobile efforts would have inevitably succeeded and been used to drive a ton more traffic to Bing - but prior to Android more people were actually taking about Yahoo as a future tech and entertainment conglomerate (remember all the hype about their hiring Marissa Mayer?) than Google. 

    Meanwhile, far from stepping on Apple's toes, they are doing fine. Biggest, most profitable company in history and all that? Where it can be argued that Microsoft creating Windows might have hurt Apple - though in fairness it was primarily due to Apple's abject refusal to take software seriously back then, resulting in great hardware that couldn't do what 70% of the market wanted or needed it to do - Google's creating Android didn't hurt Apple at all. Apple had absolutely no interest in the low end of the market and that is what Android primarily services. And again, if it hadn't been Android taking care of that need, Microsoft would have.
    dewme
  • Reply 14 of 30
    BeatsBeats Posts: 2,683member
    rmoo said:
    Beats said:

    Don’t underestimate corporate greed.
    Here’s 2 companies that did something similar and stepped on Apple’s toes:
    Google
    Samsung

    Luckily, TSMC hasn’t put knockoff Apple products on the market but nothing is protected or off limits anymore.
    Yeah, and Google and Samsung were so much better off before Android, right? I mean you can't seriously believe that? Before Android, Samsung was known as a second (or third) rate maker of washing machines, refrigerators and air conditioners. Sure they made TVs, audio equipment, DVD and Blu-Ray players etc. but were considered generally inferior to the Japanese, American and European brands. Now Samsung is considered one of the top high tech companies on the planet: the #1 seller of smartphones, the #1 seller of smart TVs, the #2 seller of tablets, their reputation in audio products has vastly improved, and they are even gaining traction as a PC (well, laptop) maker. That is in addition to their non-consumer stuff in IoT, AI, smart cars etc. Without entering and winning the Android race - beating Sony, Philips, Acer, Asus, Dell, HTC, LG, Motorola and several other companies with much better reputations as tech companies in the process - we wouldn't even be talking about Samsung right now. 

    As for Google, they are making 10 times the revenue now that they did in 2011 before Android took off. Not only did Android prevent Microsoft from getting even bigger - without Android, Microsoft's mobile efforts would have inevitably succeeded and been used to drive a ton more traffic to Bing - but prior to Android more people were actually taking about Yahoo as a future tech and entertainment conglomerate (remember all the hype about their hiring Marissa Mayer?) than Google. 

    Meanwhile, far from stepping on Apple's toes, they are doing fine. Biggest, most profitable company in history and all that? Where it can be argued that Microsoft creating Windows might have hurt Apple - though in fairness it was primarily due to Apple's abject refusal to take software seriously back then, resulting in great hardware that couldn't do what 70% of the market wanted or needed it to do - Google's creating Android didn't hurt Apple at all. Apple had absolutely no interest in the low end of the market and that is what Android primarily services. And again, if it hadn't been Android taking care of that need, Microsoft would have.

    That was my point. Companies will cut off good terms for greed.
  • Reply 15 of 30
    Intel has 15 chip fabs at 10 different locations according to its own web page. So why does it need TSMC? Why not produce 3nm chips in its own fabs? My guess is that it simply does not have the technology to do that. Rather than pay TSMC to produce chips for it, why not pay TSMC for a technology sharing agreement? Yes it would be expensive but not as expensive as it would be if something catastrophic happened to Taiwan's chip producing capabilities. In the long run this would make Intel a lot more successful as the demand for ever more advanced chips is only going to continue to increase exponentially. The same thing could be said for Apple. And if TSMC simply refuses to share technology, perhaps hire some of their engineers and "invent" it yourselves.
    edited December 2021
  • Reply 16 of 30
    cpsrocpsro Posts: 2,950member
    I get it... Intel can't afford a fight. They're begging for crumbs.
    rezwits
  • Reply 17 of 30
    crowleycrowley Posts: 9,315member
    crowley said:
    If/when Intel open a competitive foundry business they'll try to take TSMC's customers whether TSMC work with them now or not.
    The point is that if Intel wants to muscle out Apple's 3nm capacity, I think they're out of luck.

    TSMC may set up more fab capacity for Intel (if possible), but I think Apple's 3nm capacity is safe.

    Let's hope they've got 3nm working for A16/M3, though if not there's always TSMC's N4P node (which I believe is working).
    I don’t understand, this article is specifically about Intel trying to avoid a capacity fight with Apple, so why are you suggesting they’re trying to muscle Apple out?
    rezwitsbeowulfschmidt
  • Reply 18 of 30
    This is difficult for TSMC to refuse to work together. It will be accused as monopoly if refuse to cooperate. 
    williamlondon
  • Reply 19 of 30
    mjtomlinmjtomlin Posts: 2,503member
    Picture you're TSMC.

    ...Now, along comes this new Johnny-Come-Lately with a fist full of dollars and wants you to produce their CPUs while they're upgrading their own fab to more modern standards...

    Pretty sure Apple's fists are bigger and holding a lot more money.
    danox
  • Reply 20 of 30
    mjtomlinmjtomlin Posts: 2,503member
    Beats said:
    Picture you're TSMC.

    Apple has been using TSMC to produce their Apple Silicon chips for the better part of a decade. They help finance development of new cutting edge nodes, and have been a critical partner in TSMC's advancement and evolution into the world's best (and possibly largest) fab.

    At first, TSMC was reluctant to take on Apple's business because they didn't want to put so many of their eggs into such a large basket, but eventually the two got together and have been working with each other ever since. Apple likes doing business with TSMC because they not a competitor, and their IP won't accidentally leak into some other subdivision's competing products.

    Now, along comes this new Johnny-Come-Lately with a fist full of dollars and wants you to produce their CPUs while they're upgrading their own fab to more modern standards.

    Do you go with with Intel for the fast cash grab, of stick with the partner who's been working with you all this time?

    Of course, when Intel gets their own fabs up to snuff, you know you'll suffer the double whammy of losing not only the business of fabricating Intel CPUs, but Intel will then try to take as many of your other customers as they can.

    What's a body to do ... ?

    Don’t underestimate corporate greed.
    Here’s 2 companies that did something similar and stepped on Apple’s toes:
    Google
    Samsung

    Luckily, TSMC hasn’t put knockoff Apple products on the market but nothing is protected or off limits anymore.
    Yes, those were also direct competitors - well Google wasn't really until Android was shat out. At the time though Apple and Google weren't in business with each other at the scale and depth Apple is with TSMC. I seriously doubt TSMC is going to do anything to screw up their relationship with Apple.
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