What is the level of Intel’s wafer foundry?

Latest update time：2021-08-31 10:55

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According to a report by the Wall Street Journal on the 15th, Intel intends to spend US$30 billion (approximately NT$840 billion) to acquire another foundry, GlobalFoundries, to increase chip production. It is believed that if the deal is completed, it will be Intel's largest acquisition ever.

In March, Intel's new CEO Pat Gelsinger publicly called for Intel to revive and restore its former glory as a chip manufacturing leader, with capital expenditures in 2021 being the highest in nearly a decade. This merger and acquisition also seems to confirm his ambition to defeat TSMC.

But can Intel really get what it wants by spending a lot of money to join hands with GlobalFoundries? DIGITIMES Asia pointed out that wafer foundry has three main pillars: process technology, client structure, and industry ecosystem. TSMC has been working hard in these three areas for a long time and has a leading position.

Regarding Intel's ambition, semiconductor analyst Lu Xingzhi commented: "I am worried that Intel's new CEO Pat will ruin the old company. Don't think that professional wafer foundry is so easy to do." He also analyzed that Intel's acquisition this time may do more harm than good.

Manufacturing Technology

TSMC manufacturing technology versus Intel, who will win? Electronic Times reported that although Intel pointed out that the density of TSMC's 7nm process transistors is only equivalent to its own 10nm, it mainly serves its own design and production products, not other IC design companies. According to the US technology website SDxCentral, Intel's 7nm process processor has been postponed to 2023, while TSMC's more advanced 3nm process chips will begin mass production in the second half of 2022.

Parth Vala, an analyst at data analysis company GlobalData, said that TSMC's 3nm technology will perform better: compared with 5nm, the speed is increased to 15% at the same power consumption, and the power consumption is reduced by 30% at the same speed.

Lu Xingzhi also added that Intel's 7nm chips, which will be mass-produced in the second quarter of 2023, will lag behind TSMC's 5nm chips, which will be mass-produced in the second quarter of 2020, by about three years. Not to mention that GlobalFoundries, which Intel "wants to get close to", announced in 2018 that it would indefinitely suspend the development of 7nm advanced processes. At the same time, the outside world also doubts the efficiency of Americans and domestic production in the United States, otherwise why would GlobalFoundries build a new plant in Singapore instead of returning to the United States.

Customer Structure

Huawei was once TSMC's second largest customer, but broke up with TSMC last year due to US sanctions. However, TSMC still has experience in serving diverse customers, including Apple, Qualcomm, AMD, Nvidia, Xilinx, Broadcom, etc.

According to TrendForce, in the first quarter of 2021, TSMC's foundry market share was 55%, surpassing the second place Samsung's 17%. GlobalFoundries only took fourth place with a 5% market share, losing to UMC's 7%. It seems that the market share of foundry lags far behind TSMC, which also shows that GlobalFoundries and Intel's customer service capabilities need to be strengthened.

Industry Ecosystem

Electronic Times pointed out that in addition to EUV equipment supply, other material suppliers and equipment manufacturers also play an important role in building a complete ecosystem. The Taiwanese government is now vigorously promoting the localization of the semiconductor industry chain, and TSMC's 2 and 3 nanometer investments will remain in Taiwan.

On the other hand, the US government also shouts the slogan of "America First", and Intel is from the United States, which does have a location advantage that TSMC does not have. This year, it also promised to invest US$20 billion (about NT$560 billion) to expand local chip manufacturing equipment in the United States.

That being said, Intel CEO recently spoke out through the political magazine Politico, seemingly complaining that the government did not take good care of his company. He criticized TSMC for spending $12 billion to build a 5-nanometer wafer factory in Arizona, and the US government actually provided subsidies for setting up the factory. Kissinger said that TSMC kept its most valuable intellectual property in Taiwan and developed advanced products in Taiwan, which would damage the development of the US domestic industry.

Perhaps if Intel and GlobalFoundries form a "second-tier alliance", even if the results are not very good, they may not need to outsource mature processes to TSMC; in the long run, they may not even need to outsource advanced processes, and may even compete with UMC or TSMC for business. However, judging from these three pillars, even if the two cooperate in the short term, I am afraid that they will still have a long way to go to catch up with TSMC in the field of wafer foundry.

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