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Intel to outsource entry-level processor, chipset production
Source: DIGITIMES   Editor: Helan   Update Time :2018/10/30 16:56:42

As its processor supply continues to fall short of demand, Intel reportedly has begun planning to outsource production for its entry-level Atom processors and some of its chipsets while keeping its high-margin Xeon and Core CPU production in-house, according to sources from the upstream supply chain.

Among the available foundry houses, Taiwan Semiconductor Manufacturing Company (TSMC) is the only one capable of handling such rush orders, the sources noted.

However, Intel declined to comment on "market rumors."

Intel's CPU shortages grew worse in the second half of 2018 and the problem has gradually expanded from the traditional PC market to the industrial PC sector with Intel's high-end server CPUs also reportedly experiencing tight supply, the sources stated.

To ease the shortages, Intel earlier in October announced that it will invest an additional US$1 billion in 2018 expanding its 14nm manufacturing sites. The budget is expected to be spent mainly on the production of its Xeon and Core processors for servers and premium PCs with higher margins, the sources noted.

For demand from entry-level PCs and Internet of Things (IoT) devices, Intel is planning to outsource its entry-level Atom processors and 14nm chipsets to outside makers and expects the shortages to be resolved by the first quarter of 2019, the sources said.

The sources pointed out that Intel and TSMC have been in talks about outsourcing production for the chip giant's CPU and chipset since mid-2018.

Intel had worked with the Taiwan-based foundry house including having TSMC manufacture SoCs using Atom as the basic architecture in 2009 and the production of Intel's SoFIA handset SoC in 2013. Currently, TSMC is the manufacturer of Intel's FPGA series products.

Despite the CPU shortages, Intel still performed strongly in the third quarter with revenues rising 19% on year to reach US$19.2 billion and net profits growing 42% on year to arrive at US$6.4 billion.

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