Intel Struggles With Key Manufacturing Process For Next PC Chip 25
According to two sources Reuters spoke with, Intel is struggling with low yields in its next-gen 18A chip manufacturing process for its next PC chip, Panther Lake. Internal data suggests the company is far from reaching commercially viable production levels, leading some insiders to describe the effort as a "Hail Mary." Reuters reports: For months, Intel has promised investors it would increase manufacturing using a process it calls 18A. It spent billions of dollars developing 18A, including the construction or upgrades of several factories, with the goal of challenging Taiwan's chipmaking heavyweight, TSMC. Intel wants to round out its business designing chips that it largely makes in-house and TSMC helps it produce, with a contract manufacturing business that can compete with this key supplier. But whether Intel revives advanced chip production in the U.S. and gets its contract foundry on solid footing depends on closing the technology gap with TSMC. Early tests disappointed customers last year, but Intel has said its 18A is on track to make its "Panther Lake" laptop semiconductors at high volume starting in 2025, which include next-generation transistors and a more efficient way to deliver power to the chip.
The chipmaker has hoped that producing such an advanced in-house chip would grow external interest in its foundry, at a time when new CEO Lip-Bu Tan has explored a major shift to course-correct that fledgling business, Reuters previously reported. Yet only a small percentage of the Panther Lake chips printed via 18A have been good enough to make available to customers, said the two people, who were briefed on the company's test data since late last year. The sources spoke on condition of anonymity because Intel did not authorize them to disclose such information. This percentage figure, known as yield, means Intel may struggle to make its high-end laptop chip profitably in the near future. [...]
Intel in the past has aimed for a yield north of 50% before ramping production because starting any earlier risked damaging its profit margin, three of the sources said. Intel typically does not make the lion's share of its profit until yields reach roughly 70% to 80%, key for a chip as small as Panther Lake where many defects would make it a tough sell, the three people said. Profit also flows from market expansions and building up factory output, Intel said. An immense yield increase would be a tall task by Panther Lake's fourth-quarter launch, the two people with knowledge of Intel's manufacturing operation said. But without such a jump, Intel may have to sell some chips at a lower profit margin or at a loss, the two sources briefed on test data said. The company has warned it could exit leading-edge manufacturing entirely if it does not land external business for 14A, which is 18A's next-generation successor.
The chipmaker has hoped that producing such an advanced in-house chip would grow external interest in its foundry, at a time when new CEO Lip-Bu Tan has explored a major shift to course-correct that fledgling business, Reuters previously reported. Yet only a small percentage of the Panther Lake chips printed via 18A have been good enough to make available to customers, said the two people, who were briefed on the company's test data since late last year. The sources spoke on condition of anonymity because Intel did not authorize them to disclose such information. This percentage figure, known as yield, means Intel may struggle to make its high-end laptop chip profitably in the near future. [...]
Intel in the past has aimed for a yield north of 50% before ramping production because starting any earlier risked damaging its profit margin, three of the sources said. Intel typically does not make the lion's share of its profit until yields reach roughly 70% to 80%, key for a chip as small as Panther Lake where many defects would make it a tough sell, the three people said. Profit also flows from market expansions and building up factory output, Intel said. An immense yield increase would be a tall task by Panther Lake's fourth-quarter launch, the two people with knowledge of Intel's manufacturing operation said. But without such a jump, Intel may have to sell some chips at a lower profit margin or at a loss, the two sources briefed on test data said. The company has warned it could exit leading-edge manufacturing entirely if it does not land external business for 14A, which is 18A's next-generation successor.
Oh no! (Score:5, Insightful)
Almost like $100 billion in stock buybacks and firing engineers was a bad idea.
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Almost like $100 billion in stock buybacks and firing engineers was a bad idea.
"What?! NOOOOoooo! Those stock buybacks created create value for our shareholders! It's unjust to judge us for the consequences happening today based on our causal actions of yesterday because that could make us lose money!" - every CEO ever
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by artificially inflating the stock price, while spending the company's assets on something that by definition is worth less after buying it; after all, shares which the company owns itself cannot contribute to its bottom line.
This is not a sustainable business model. In fact, anybody who even suggests such a scheme should be dismissed with prejudice. Unless, you know, the company no longer has any shareholders who believe in the long-term success and growth of the company, which is indicative of way worse
We all know what will happen. (Score:4, Insightful)
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please pay no attention to how many wafers we burn through to produce even a dozen of those 18A CPUs
Leaving aside the facetiousness of your post, wafers cost around $30k, if you're producing a dozen CPU with "how many wafers", implying more than one, then you may buy something cheaper than an 18A CPU, like a new luxury car. Even with poor yields you should be getting many hundreds of CPUs off a single wafer.
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Just let them sell the fabs to TSMC (Score:3)
The sooner they sell, the better price they can get for them.
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You mean force them to buy. TSMC has very little interest in Intel.
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I don't see why they wouldn't want the advanced ones. Unless they need more space for their manufacturing lines, they can adapt the Intel cleanrooms and get a big expansion in their number of EUV steppers ... and they get a bunch of high NA ones too which they skipped on.
Re: Just let them sell the fabs to TSMC (Score:2)
For pennies on the dollar.
Who cares (Score:4, Insightful)
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I didn't know they were still in business? (Score:1)
Are they baiting the competition .....? (Score:1)
Panther Lake is still mostly TSMC (Score:5, Interesting)
Intel plans to move Panther Lake's compute tile in-house (assuming they can get yields under control), but the rest of the active silicon (graphics tile, SoC tile, I/O tile), which I believe represents the majority of the die space, will still be TSMC.
Intel's given confusing statements about this in the past because when they cite what percentage of the total die area they manufactured versus TSMC, they include the area of the interposer underneath all the tiles in their column, which is silly. Arrow Lake (the predecessor to Panther Lake) is 100% manufactured by TSMC (all active silicon), but Intel claimed that they made more than half the chip, just because they put all the TSMC tiles on an Intel interposer.
Looks like Intel fired the wrong people (Score:3)
And they did that over a longer time. Reminds me as how Boeing does not know how to design planes anymore because they have no experienced plane designers.
There was a time when Apple could have bought them (Score:2)
There was a brief window when Apple could have invested into Intel to maintain their much desired levels of control over Apple products.
Now it seems to be too late. I suspect Intel will thrash about for a few years and then wither away into irrelevance like Motorola, Lucent, HP et al
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Perhaps a small, core group of talented engineers will leave Intel to establish a new company - history repeating itself, in other words.
Assuming there still is a group of talented engineers left at Intel...
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and then they would of been forced to give amd the same info.
Ask China for help (Score:1)
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