‘Intel will order $15 billion worth of chips from TSMC in the coming years’ – update

Intel will order $15 billion worth of chips from TSMC in the coming years. This is what analysts from Goldman Sachs report. Intel has been outsourcing parts of its production to TSMC for some time, including for its Arc GPUs.

The Taiwanese business newspaper Commercial Times has the news from the American investment bank Goldman Sachs Securities. It estimates that Intel could outsource a maximum of $18.6 billion and $19.3 billion in 2024 and 2025 respectively, although in practice this will be lower. Goldman Sachs estimates that Intel is more likely to outsource $5.6 billion and $9.7 billion, respectively, to TSMC in those same years. In total, this amounts to $15.3 billion. That would account for 6.4 percent of TSMC’s annual revenue in 2024 and 9.4 percent in 2025. Intel and TSMC have not yet confirmed that information themselves.

From next year, almost all future Intel processors will be based on chiplets, for example with CPU cores, integrated GPUs and I/O. Intel continues to produce some of those chiplets itself, but other chiplets are outsourced to other manufacturers. For example, Intel’s upcoming Arrow Lake CPUs will have a CPU chiplet produced by Intel, but also a GFX tile with integrated GPU that TSMC will produce.

Intel previously announced that the company will outsource parts of its production to other manufacturers. The company does this as part of its IDM 2.0 business model, which was introduced in 2021 by CEO Pat Gelsinger. Intel will continue to produce some of its CPUs itself, but will also outsource parts of its production. Intel will also produce chips itself for other companies, such as TSMC and Samsung Foundry.

Update, Monday: The original article suggested that Intel would purchase additional chips from TSMC because it is now experiencing problems in its own chip factories. However, it was already known that Intel would outsource part of its production for future products. The article has been adjusted accordingly.