Despite 7nm Struggle, Intel to Keep Investing in 5nm, 3nm Chip Technologies

Despite setbacks in developing a 7-nanometer manufacturing process, Intel isn’t giving up on in-house chip production at the 5nm and 3nm node. 

CEO Bob Swan today spoke at an investors event as Intel mulls over whether to outsource its 7nm manufacturing to a third-party foundry. The company is set to make a decision on the matter in January. But according to Swan, Intel’s goal is to remain an integrated device manufacturer (IDM) that churns out most of its own silicon. 

“So we're going to continue to invest in seven. We're going to invest in five. We'll invest in three, going forward. So those three things are going to stay the same,” Swan said during the session. (Seeking Alpha has a full transcript of his remarks.)

Intel’s 7nm process was supposed to go online in 2021’s fourth quarter to help keep the company's CPUs competitive. However, a defect in the manufacturing technology caused the company to delay its arrival to as far as 2023, opening the door for rival AMD to dominate in the PC chip space for years to come.  

To ensure the 7nm chips arrive on time, Intel is now considering hiring a third-party foundry to build the silicon. One likely candidate is TSMC, which is already building PC processors for AMD using its own 7nm node. 

The outsourcing talk has caused observers to wonder if Intel will retreat from chip manufacturing and go fabless like AMD. However, during today’s investors event, Swan said: “We're going to continue to be an IDM and we're going to evolve how the IDM operates going forward.” 

In the near-term, Intel’s main challenge is keeping the 7nm process on track for 2023 and 2024, for what Swan called a “predictable cadence.” 

“We've got a strong lineup of products, but for 2023, we want to make sure we can deliver for our customers,” he said. “Second, as we evaluate the progress we make on our process technology and evaluate others’ progress on their process technology, what is the performance implications for the product that we would launch in that timeframe?”

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In TSMC’s case, the company’s 3nm process is scheduled to go into volume production in 2022, which could put Intel at a serious disadvantage if its 7nm process fails to come through.

Another major client of TSMC is Apple, which has begun ditching Intel silicon. Last month, the company launched new Macs built with Cupertino's own processors using TSMC's new 5nm manufacturing technology.

As a result, Intel has some big decisions on its hands, which could buoy or sink the company's competitiveness in the CPU space. "We made really good progress during the course of the year, but we got to continue to invest in and improve our 7-nanometer process technology," Swan added. "So that cadence, predictable cadence of leadership products continues going into 2023 and beyond."