Intel Outsourcing More Arrow Lake Orders To TSMC Amid Doubts

Intel is using TSMC for more of its Arrow Lake CPU orders as the company becomes ever more dissatisfied with the performance of its foundry division.

It’s all part of a much larger struggle for Intel, not only in the consumer space but in data centers and AI, both key markets to its future. Intel also powers huge resources, yet has been unable to leverage those to gain control and is now seeking arms-length manufacturing assistance.

Intel To Outsource More Arrow Lake Orders To TSMC Amid Foundry Doubts

Intel is increasingly turning to TSMC, which already delivers better chips than Intel can produce for most companies, to build more of its upcoming Lunar Lake and Arrow Lake CPU cores, some of the biggest pieces in the board game on which are Intel’s efforts to keep up at all in CPUs. Especially noteworthy is that the Arrow Lake “Core Ultra 200” series will be the first to tap external foundry for Intel.

The shift underscores Intel’s struggling Intel Foundry Services (IFS) and the company’s desire to remain competitive against rivals quarterbacks such as AMD, which already has a TSMC Fund for chips using advanced manufacturing lines.

This unique tile arrangement was also made possible with Intel’s Foveros 3D packaging technology, and only further illustrates the company’s attempts at expanding upon traditional chip design while still utilizing TSMC. Such overreliance on TSMC only prompts the question of what will become of Intel manufacturing.

This is likely Intel will be a bigger TSMC customer, especially with the potential of TSMC’s 3nm process in conjunction with Intel’s Falcon Shores AI GPUs.” There are even indications that the company would sell its manufacturing division entirely as Intel Foundry Services starts racking up costs in the value chain. While outsourcing makes sense in the short term—given Intel’s current financial difficulties—it’s also a big challenge and one that raises questions about what the company is aiming for long term.

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