Intel in talks with TSMC, Samsung to outsource chip production

Intel Corp. is mulling outsourcing some of its chip production, another boon for Samsung Electronics who is said be engaged in talks on consignment deal.

Bob Swan, Intel’s chief executive officer, said he would reveal the outsourcing plans when company earnings come out on Jan. 21, according to Bloomberg and The Wall Street Journal.

The Santa Clara, California-based chipmaker had approached Samsung Electronics and Taiwan Semiconductor Manufacturing Co. (TSMC) about a potential partnership, according to the sources. Talks with Samsung Electronics are at a more preliminary stage, the sources added.

Shares in Samsung Electronics closed Monday 2.48 percent higher at 91,000 won ($82.83).

The sourced components are unlikely to make it to market until 2023 at the earliest, according to Bloomberg.

Intel has fallen significantly behind its Asian rivals in nanometer technology, facing successive delays in the fabrication of 10-nanometer and smaller chips.

Industry experts say TSMC has already achieved economies of scale with 5-nanometer production, making it a prime candidate for Intel’s outsourcing. TSMC has also offered to produce Intel chips using the latest 4-nanometer process after initial testing with the 5-nanometer process, according to Bloomberg.

But the Taiwanese chipmaker is nearing full capacity, which could open up opportunities for Samsung Electronics.

Intel remained the world’s largest integrated device manufacturer in 2020, according to market research firm IC Insights. But it has been losing out in the nano race and facing increasing pressure as major clients like Apple and Microsoft have started making their own designs for PC chips.

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