DigiTimes: Intel To Outsource 14nm Chips To TSMC

DigiTimes is reporting that Intel intends to outsource 14nm H310 chipsets and 300-series processors, meaning the Coffee Lake chips, to TSMC to aid in production. We are working to verify the report and will update as necessary.

It seems counter-intuitive for Intel to outsource production of its Coffee Lake processors, especially due to design complexity and trade secrets, but outsourcing the H310 chipset, which has been plagued by poor availability for months, seems more plausible. These relatively simple chips would seemingly be comparatively simple to port over to TSMCs foundries, especially given the company's partnership with Intel on other products, such as the SoFIA SoC's and Stratix FPGAs. Currently the 14nm chipsets are clogging Intel's 14nm foundries, so easing that production load would free Intel up to produce more 14nm processors.

The signs of an impending shortage of Intel's 14nm chips became clear when the company announced during its latest earnings call, saying, "Our biggest challenge in the second half [of 2018] will be meeting additional demand, and we are working intently with our customers and our factories to be prepared so we are not constraining our customers' growth."

But signs of Intel's 14nm struggles had emerged even before the company publicly acknowledged the issues. Intel's 14nm H310 chipsets have been in short supply, or simply unavailable, since May 2018. Several Taiwanese OEMs, including Acer's CEO Jason Chen, stepped forward last week and said that shortages are already impacting their supply chains.

We followed up last week with pricing and availability analysis that found that many of Intel's non-K SKUs, meaning the cheaper models that generate less margin, are experiencing a sharp rise in pricing. Intel's Core i7-8700K is also popping in and out of stock at major retailers, suggesting that the company is having a hard time meeting demand.

Over the weekend, SemiAccurate unveiled purportedly internal HPE documents that highlight the severity of the shortage. The documents, which pertain to Intel's data center Xeon processors, instruct the company's sales representatives to 'steer demand' to other Xeon products that are available, or to recommend EPYC processors.