Intel may abandon contract chip manufacturing

After GlobalFoundries left the cutting edge 'foundry' or chip making market earlier this year, there were only three large companies left that were engaged in this on a large scale. TSMC is the largest foundry company, Samsung is also at the forefront but struggling to attract customers, and Intel's custom foundry business has not been very successful either. Now the word is out that Intel may stop making chips on contract - that is, for other customers.

Intel could stop manufacturing chips for contract, that is, for other customers

DigiTimes quoted sources in the Taiwanese chip manufacturing industry as saying they would not be surprised if Intel abandons this market. The 'Intel Custom Foundry' unit was created eight years ago, is said to charge higher prices than the competition, and has no major customers or large registered orders. There was some interest in Intel's 10nm node, but we all know how that developed in the end with a lot of delays.

Taiwan's semiconductor companies are not surprised by Intel's possible move to abandon the contract chip manufacturing market, a market in which the American company has never really shown its commitment, the sources said. It entered the market in 2010, but has never managed to excel or find significant clients.

Sources also cited some reasons why Intel Custom Foundry has not achieved its goal. First, TSMC alone has achieved a market share of over 50%, and other leading manufacturers such as Samsung and GlobalFoundries have been working hard to consolidate their positions. The relatively higher manufacturing costs offered by Intel and its weak supply chain support compared to TSMC and Samsung are also among the reasons.

DVHardware Source