Intel is stepping up in its battle against Taiwan Semiconductor Manufacturing to win more chip manufacturing business.
During a videoconference call Wednesday with reporters,
Intel
(ticker: INTC) presented its latest technology pipeline and sales strategy to gain share from market leader Taiwan Semiconductor Manufacturing (TSM), also known as
TSMC.
Executive Mark Gardner said the company’s Foundry Services offers a compelling proposition for its customers, citing what Intel says is a more geographically secure supply chain.
Intel’s chip making factories and chip assembly/testing/packaging sites are placed in different places around the world, including the U.S., Gardner noted. Intel said it expects to put more of its new assembly and advanced packaging services in New Mexico. In comparison, most of TSMC’s chip making facilities are in Taiwan, though the company does have some facilities and offices in the U.S. and Europe and elsewhere in Asia.
“Our first key solution as an Intel Foundry Services group is the open system foundry [letting customers pick and choose services],” he said. “Where the foundation of it is really about secure supply—both from a geodiversity and Western R&D [basis].”
Large technology companies sending some of their semiconductor business to factories outside of Asia might be a good idea. China regards Taiwan as a breakaway province that it intends to unify with the mainland. The U.S., meanwhile, considers Taiwan’s chip production to be essential for maintaining military capability and economic security, setting up a fraught geopolitical backdrop.
Intel executives are also optimistic about the company’s road map for future chip packaging technologies, which will enable coming chips to improve performance at a lower cost. They mentioned how Intel plans to transition to glass substrate materials, which is stiffer than the current technology and could enable better chip features. Another promising packaging technology is called co-packaged optics, which is expected to go into production at the end of next year and offer higher bandwidth connections to chips.
Gardner said Intel Foundry Services is willing to let customers use a subset of their services—even if it means they use other foundries for chip making and use Intel for just testing or assembly.
Intel has a steep hill to climb. According to TrendForce, TSMC has about 59% market share of the third-party chip manufacturing business, followed by
Samsung
at 16%. Intel’s share is minimal as it begins to ramp up its foundry services to external customers.
But it seems likely Intel should be able to gain some share, based upon its marketing strategy of offering more manufacturing capacity and services in Western countries. Intel said it is in engagement discussions with 7 of the top 10 largest chip-packaging clients, with
Cisco Systems
(CSCO) and
Amazon
(AMZN) Web Services as two major publicly announced customers.
Write to Tae Kim at [email protected]
Read the full article here