Introduction
In a strategic move that has taken the industry by surprise, Intel has announced the cancellation of its in-house 20A process node for its upcoming Arrow Lake processors as per Tom’s Hardware.
The company will now rely on external manufacturing, most likely from partner TSMC, for the consumer market. This decision marks a significant shift in Intel’s production strategy and is part of its broader restructuring plan amid financial challenges.
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Key Takeaways:
Outsourcing manufacturing to external foundries like TSMC helps Intel cut costs while maintaining its competitive edge in processor design.
Intel has canceled its 20A process node for Arrow Lake processors, opting to use external nodes instead, likely from TSMC.
Intel is undergoing significant restructuring, including laying off 15,000 employees, as part of cost-cutting efforts.
The company is shifting its focus to the 18A node, set for launch in 2025, which includes advanced technologies like RibbonFet and PowerVia.
Intel’s packaging expertise will play a crucial role in the Arrow Lake processors, which will use a chiplet-based design.
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Key Highlights
- Intel cancels 20A process for Arrow Lake processors, opting for external manufacturing.
- Intel shifts focus to the 18A node, set for release in 2025.
- Intel 20A technologies like RibbonFet and PowerVia contributed to 18A advancements.
- Layoffs of 15,000 workers align with cost-cutting and restructuring goals.
- TSMC likely to manufacture Arrow Lake components while Intel focuses on packaging.
Intel Shifts Strategy Amid Financial Challenges
Intel’s decision to cancel its 20A process node for Arrow Lake processors signals a major shift in its production strategy. Instead of using its own manufacturing process, Intel will rely on external foundries, most likely TSMC, to manufacture all chip components for the Arrow Lake series.
Intel Cancels 20A Process Node for Arrow Lake, Partners with External Foundries
Intel has announced a significant shift in its strategy for the upcoming Arrow Lake processors. The company has decided to cancel the use of its own 20A process node and will instead rely on external nodes, likely from TSMC. Intel will only handle the packaging of the chip components manufactured externally.
This decision marks a major change in Intel’s plans for Arrow Lake, which was previously set to use the 20A node for some chips. Now, Intel is focusing on optimizing resources and cutting costs by outsourcing production. The company aims to release Arrow Lake in 2024, with external manufacturing partners playing a key role.
Intel’s Restructuring Amid Financial Struggles
Intel’s announcement comes during a period of significant restructuring. The company recently reported poor financial results and is laying off 15,000 employees.
These layoffs are among the largest in Intel’s 56-year history. The restructuring is part of Intel’s effort to regain profitability and stay competitive in the semiconductor market.
Initial Plans for Arrow Lake and 20A Node
Intel had initially showcased Arrow Lake processors manufactured on the 20A node at its Innovation 2023 event.
This indicated that the chips were far along in development. The 20A node planned to bring several technological advancements, including RibbonFet Gate-All-Around (GAA) transistors and PowerVia backside power delivery.
However, Intel has dropped 20A for Arrow Lake. Instead, it will use external nodes, likely from TSMC, to produce all chip components.
This move allows Intel to avoid the high costs associated with ramping up production for a new node.
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Focus Shifts to Intel 18A Node
Intel’s decision to cancel 20A does not mean it’s abandoning its ambitious goals. The company is now fully focused on its 18A process node, which is scheduled to launch in 2025.
Intel has shifted its engineering resources from 20A to 18A, citing promising yield results for the newer node.
The 18A node is an advanced version of 20A, incorporating the same RibbonFet and PowerVia technologies. Intel has reported a defect density (D0) of below 0.40 for 18A, indicating strong yield performance. A defect density below 0.5 is typically considered production-ready for a new node.
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Why Intel Chose External Nodes for Arrow Lake
The decision to outsource Arrow Lake’s chip components to external foundries like TSMC is a strategic one.
By doing so, Intel avoids the heavy investment required to bring the 20A node into full production.
This move aligns with Intel’s broader goal of cutting costs and streamlining its production processes.
Intel’s role in Arrow Lake will now be limited to packaging the externally produced chiplets into the final processor.
This packaging approach allows Intel to maintain some control over the design while outsourcing the more expensive manufacturing stages.
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Intel and TSMC Collaboration
Intel’s decision to rely on external foundries highlights the growing importance of collaboration in the semiconductor industry.
TSMC, the world’s leading contract chipmaker, has already partnered with tech giants like Apple and AMD. By outsourcing to TSMC, Intel can focus on its core strengths, such as packaging and integrating chiplets.
Intel’s packaging technology has become a crucial differentiator.
Arrow Lake processors will consist of multiple chiplets, which are smaller pieces of silicon that Intel will assemble into a single processor.
This modular approach allows for greater flexibility in performance and design.
Intel’s Path Forward
By skipping the 20A node and focusing on 18A, Intel is working to accelerate innovation and maintain its competitiveness.
The company’s ambitious goal of delivering five process nodes in four years is part of its strategy to regain its leadership position in semiconductor manufacturing.
The learnings from the 20A node have already contributed to the development of 18A. Technologies like RibbonFet and PowerVia, first introduced with 20A, will play a critical role in Intel’s future products.
The 18A node is expected to deliver better performance and efficiency, keeping Intel at the forefront of the industry.
Cost-Cutting and Future Prospects
Intel’s decision to forgo the 20A node is also tied to its broader cost-cutting efforts. By avoiding the high ramp-up costs associated with a new node, Intel can focus its resources on more advanced technologies. This move is especially important as the company undergoes restructuring and aims to improve its financial health.
Intel has reaffirmed its commitment to the 18A node, which is expected to launch in 2025. The company’s ability to deliver on this timeline will be critical as it faces increasing competition from rivals like AMD, Apple, and TSMC.
Conclusion
Intel’s shift away from the 20A node for Arrow Lake and its move to external foundries like TSMC reflects a significant change in strategy. The decision is driven by a need to cut costs and focus on more advanced technologies like the 18A node. Intel’s packaging expertise and collaboration with external foundries will play a key role in its future success.
As the semiconductor industry continues to evolve, Intel’s ability to adapt will be closely watched by investors and consumers alike. The success of Arrow Lake and the 18A node will be key indicators of Intel’s ability to remain competitive in a rapidly changing market.
