Approximately 30% of Intel chips It is manufactured outside of its semiconductor plants. And most of these ICs are produced by TSMC. This Taiwanese company is the largest chip manufacturer on the planetand therefore it is also Intel’s main competitor in the market for custom semiconductor manufacturing for third parties. Despite this, Intel is deeply dependent on TSMC.
Currently, the latter company manufactures Intel’s most advanced integrated circuits in those nodes where the company led by Lip-Bu Tan has not yet reached optimal wafer performance. The CEO of Intel has confirmed recently that his company is also outsourcing the production of those chips that have frequent demand peaks, and which, therefore, is not able to manufacture in sufficient quantities to satisfy the needs of its customers.
TSMC is producing Intel’s entire Lunar Lake line, and most of Arrow Lake as well. In addition, Intel is one of the first clients of this Taiwanese company with access to 2nm node latest generation. In fact, TSMC has already started production testing of the compute tile of Nova Lake at its Hsinchu plant, and large-scale manufacturing should begin before the end of 2026. During Intel’s latest financial results presentation, Tan confirmed something indisputable: TSMC is an essential partner of your company.
TSMC also depends on Intel
Intel’s current dependence on TSMC is a consequence of the delay accumulated for years in the development of its manufacturing nodes, before the arrival of Lip-Bu Tan. In fact, the delays in the jump to 10 nmand later the 7nmcontributed to TSMC overtaking Intel from a technological point of view. In addition, dependence on Intel is also based on the need to cover short-term demand.
The dependence on Intel is based on the need to cover short-term demand
This scenario clearly reflects that Intel and TSMC are competitors. But they are also partners. In fact, few people know that Intel sells chip manufacturing equipment to TSMC. Pat Gelsinger confirmed itthe former CEO of Intel, at the end of 2024 during a meeting with his investors:
“TSMC is an impressive company. They serve their customers well, and they serve us well. Lunar Lake would not exist without TSMC (…) But we also supply them with some of our advanced equipment. “It is a complex relationship that is important for Intel, for TSMC and for the entire industry,” Gelsinger explained.
It is clear that the former CEO of Intel wanted to convey positivity with this statement, and, to the extent possible, defend his management. We all know how it ended. Be that as it may, there is no doubt about one thing: Intel’s dependence on TSMC is not temporary; It is structural. It is the result of years of technological delays, is maintained by TSMC’s superiority in mature advanced nodes and has been consolidated as part of a strategy that prioritizes flexibility over in-house production.
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