TSMC expected to produce Intel Core i3 chips on 5 nm nodes in 2H21, 3 nm high-end chips coming in 2H22

Intel is facing an important turning point in its history. On the one hand, investors are urging the company to change its manufacturing and design strategies in order to safely navigate the setbacks and delays with the 10 nm and 7 nm nodes. On the other hand, Intel is progressively losing important market shares with the relentless competition from AMD on the desktop and server segments, while companies like Apple chose to cut ties with Intel and produce their own processors based on ARM’s mobile core solutions. As a  logical solution to all these problems, Intel has been considering outsourcing some of its product lineups to other foundries since the beginning of 2020. Going fabless is certainly not an option, as Intel already invested so much into many production and R&D centers. The official outsourcing plans should be revealed later this month during the financial report, but, thanks to investigations conducted by market analysts from TrendForce, we already know some details regarding the outsourced product lineups.

According to TrendForce, Intel is already outsourcing 15-20% of its non-CPU products to TSMC and UMC, including the upcoming DG2 GPUs. On the CPU side, the Alder Lake processors scheduled to be released in the second half of 2021 may be the last major lineup produced entirely by Intel’s fabs. Starting with 2H21, Intel plans to gradually outsource some of its CPU lineups to TSMC, and the first processors to enter mass-production at the Taiwanese foundries are expected to be the Core i3 chips. Alder Lake will most likely be the last desktop-grade CPU lineup to be manufactured on Intel’s 10 nm Enhanced SuperFin nodes, whereas the future Core i3 ordered at TSMC will be using the 5 nm nodes. Intel also plans to outsource future mid-range and high-end processor lineups on TSMC’s 3 nm nodes in 2H22.

The TrendForce report also suggests that the collaboration with the Taiwanese foundries should allow Intel to keep its market position as one of the top integrated device manufacturers, while maintaining in-house production lines for chips with high margins. Additionally, this strategy should bring more flexibility for Intel’s plans, also enabling more effective CAPEX expenditures on advanced R&D. Last , but not least, Intel would finally be on equal footing with AMD and all other TSMC clients when it comes to advanced CPU production nodes.

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