Intel’s next-generation Panther Lake processors are said to incorporate 70% in-house silicon, likely boosting the company’s bottom line. Moreover, with its Nova Lake CPUs expected to be launched in 2026, the share of internally manufactured silicon will probably grow resulting in higher profits for Intel. However, there is a caveat.
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More About the Intel Panther Lake Processors
Speaking on an earnings call to analysts and investors, Intel Chief Executive Officer Pat Gelsinger indicated that although a few components in Panther Lake will, as before, be supplied by outside vendors, well in excess of 70 percent of the silicon area would be home-brewed. Most of Panther Lake’s wafer capacity will go back to Intel’s factories, he also said. As of now, all the dies of Intel’s flagship Arrow Lake and Lunar Lake desktop and laptop processors are made by TSMC, but the company assembles and packages them using its Foveros 3D technology. And of course, the reliance on TSMC impacts margins because Intel is competing with AMD and other rivals on price, and is required to absorb TSMC’s profit margins.
Lunar Lake also integrated on-package memory that raised the costs of sourcing and managing the packages, leading to additional margin pressures. With more designs coming through internally, Intel will probably see better margins. Intel will use its 18A process tech for the main compute tile for Panther Lake. Gelsinger also revealed that certain Nova Lake SKUs would still be produced on TSMC.
Most of the Nova Lake processors will be greater than 70% in-house silicon per model, but there will still be some external sourcing, and thus margins will vary by SKU as well. Gelsinger also noted some flexibility on Nova Lake products, but most of that is reserved for the new production of Intel itself or its foundry. However, he stressed that when it comes to wafer fabrication, Intel will be sticking to its plan of in-sourcing wafer production, but will still use external technologies, when it gives Intel certain advantages for its products. But Gelsinger thanked TSMC as a partner, noting that the Lunar Lake processors demonstrated both companies working together, something Intel will do selectively going forward.
