Will TSMC receive CPU orders again? Analysis: Unless Intel abandons wafer manufacturing

Intel's recently released third-quarter results for fiscal year 2020 showed that the company's revenue for the quarter was $18.33 billion, a year-on-year decrease of 4%, and its net profit was $4.28 billion, a year-on-year decrease of 28.6%. Analysts warned that Intel's operating difficulties may have just begun.

Taiwanese media MoneyDJ quoted MarketWatch as saying that Intel did not comment much on the transformation plan during this earnings conference, and senior management only promised to provide more information in January 2021. However, Bank of America analyst Vivek Arya believes that the manufacturing problems Intel is facing may not be easily solved, especially in the highly competitive chip industry.

The reason is that Intel's huge size may make it challenging for the company to find a wafer foundry partner.

(Source: Internet)

Vivek Arya said that it is still unclear whether Intel will partially or completely transform into an IC designer. It is also unknown whether the foundry has excess capacity to manufacture transistors for Intel, or whether it is willing to help competitors in a short period of time, and then cancel the order after the latter improves its internal process, leaving an empty fab in the end.

In addition, Jefferies analyst Mark Lipacis published a research report pointing out that if TSMC agrees to build CPUs for Intel using advanced processes when Intel is actively catching up, then TSMC is essentially helping Intel turn things around and ultimately hand over orders to two high-growth customers, AMD and Nvidia.

From a strategic perspective, Mark Lipacis believes that TSMC will only manufacture CPUs for Intel if Intel gives up on building advanced process transistors.

Intel CEO Bob Swan pointed out in the earnings call that the company will decide in early 2021 whether to use its own technology or outsource the production of 7nm chips to a third party regarding the delayed launch of 7nm chips.