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Intel Corp (NASDAQ:INTC) To Use TSMC (NYSE:TSM) Foundry For Production of 6nm Chips

As from next year, TSMC (NYSE:TSM) will be manufacturing Intel Corp’s (NASDAQ:INTC) 6-nanometer chips according to a report from the Commercial Times newspaper. This news comes after the company indicated that its chief engineering officer and the group president for systems architecture, technology, and Client Group, Venkata “Murthy” Renduchintala will step down on August 3.

Intel restructures its technology and systems architecture group

The announcement of Renduchintala leaving is an indication that the company is reconsidering some of its operations as it continues to face manufacturing challenges. This includes the manufacture if the next-gen chips. Intel indicated in its second-quarter earnings report that it was behind schedule in the development of chips using the 7-nanometer (nm) architecture. This comes after Advanced Micro Devices Inc. (NASDAQ:AMD) released 7nm chips that are being used in Microsoft Corp’s (NASDAQ:MSFT) Xbpx Series X.

According to Bob Swan the company’s CEO they are considering having other companies manufacture its chips instead of depending on its capacity. The company plans to eliminate the role of Renduchantala. Renduchantala was initially in charge of the IoT and client segments and the Systems Architecture group. Intel has split the segments he was leading into five which include the technology group headed by Ann Keller that will work on the 7nm chips.

Intel turns to TSMC for 6nm chip manufacture

Intel will from next year use TSMC to manufacturer its 6nm chips as it indicated last week that the 7nm chip will be delayed until 2022. Swan indicated that Intel had invested in various contingency strategies to prevent any more uncertainty in the schedule as the company plans to include a third party’s foundry. Already Intel has ordered 180,000 from TSMC for the production of the 6nm chip. For now, it is unclear who Intel will partner with to manufacture the 7nm chips.

This announcement overshadowed the upbeat earnings that Intel reported for Q2. Intel is among the tech stocks that have announced earnings this past week. Christopher Rolland of Susquehanna indicated that considering the new timeline it is unlikely that Intel will match or surpass TSMC in the next five years.

Ruchi Gupta

Ruchi Gupta covers various beats from finance to technology and from lifestyle to hobbies. She has an MBA in Finance. Ruchi enjoys writing on celebrities and political news. She likes traveling and exploring places.

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