Rumour: Intel agrees deal with Samsung to outsource CPU manufacturing and boost supply
For so long the stubborn child of the hardware world, Intel has finally given in and asked for help. Following on from an open apology to partners last week for failing to address supply issues, the CPU giant has asked its buddies at Samsung to help manufacture its processors and get Intel’s fabrication back on track.
As a lot of people will be well aware, Intel has struggled with both a shortage of chips and the shift to the 10nm fabrication process. Reports from South Korea have now indicated Intel has agreed a contract with Samsung to produce desktop processor chips using Samsung’s foundries. This would be the first time in history Samsung has used a third-party foundry to manufacture its core range of CPUs.
Over the years, Intel has been reliant on its own foundries for chip production. From fabrication to store shelves, Intel has handled it all. When it all works, this affords Intel greater profit margins as they haven’t got to pay out for third-party manufacturer. The downside is when it goes wrong, leaving Intel with nothing to fall back on.
We can see the effect of this in sharp focus over the past four or so years, wherein Intel’s shift from 14nm to 10nm fabrication has suffered countless setbacks. Meanwhile, AMD has been farming out fabrication to TSMC, whose 7 nanometer node was used for Zen 2.
It remains to be seen which lines of Intel processors are offloaded to Samsung, as well as whether this has any knock-on effect to the quality of the chips. Intel has long preferred to keep everything in-house in order to maintain quality so it’ll be interesting to see whether there are any notable changes once the Samsung processors begin heading to market.
The one certainty of this move is an increase in the supply of Intel processors. Intel’s effective production capacity will be expanded and this also opens the door to shifting manufacturing to 7nm EUV as quickly as they can. Increased supplies means fewer customers will be faced with the choice of AMD or nothing, which should help Intel maintain its market share in the short term.