Intel’s Foundry Business Hinges on 14A Node Success

In response to a question about Intel’s foundry strategy from Timothy Curry—a UBS analyst—Intel CEO Lip-Bu Tan mentioned that although the company has a team that is laser focused on developing its 14A node, the node hinges on customer commitment at the moment. This obviously includes Intel itself, but also its potential third party customers and if there will be enough business for Intel to make money on the upcoming node. Lip-Bu Tan said that it “has to meet my requirement in terms of performance and yield. It’s a lot of responsibility to be serving our customers, make sure that we can deliver the result—consistent, reliable result—to them, so that their revenue can depend on us.”

It’s clear that Intel’s new CEO is very focused on revenue for the company and its customers, which makes sense considering the current situation at Intel. However, the question is if TSMC will be able to handle potential future business from Intel, as they will most likely be the only viable option for Intel, if the company decides that the investment into its 14A node doesn’t make financial sense. The company has already announced that it will “further slow the pace of construction in Ohio to ensure spending is aligned with market demand” while cancelling its announced fab in Germany altogether. Admittedly the German fab was never intended to be a leading edge fab, but with so many cancelled projects, one has to wonder where Lip-Bu Tan will take the company and without third party customers, it sounds like Intel’s foundry business might soon give up on trying to be a cutting edge foundry. For now, a lot hinges on its current 18A node and if it can attract enough third party interest for it.