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With Bernstein analysts calling on their clients to abandon Intel until at least 2030, the erstwhile behemoth in the chipmaking sphere is at a cyclical nadir and is expected to remain there for the next few years as it continues to lose revenue and surrender its margins. Yet, TSMC's immediate reluctance to adopt the latest lithography tech opens a narrow window for Intel to regain its lost glory.
Intel intends to experiment with High-NA Extreme Ultraviolet (EUV) lithography within the parameters of its upcoming 18A (1.8 nm) process node before formally incorporating it into its 14A (1.4 nm) manufacturing process.
In contrast, TSMC seems content with iterative improvements, including multiple masks for greater production efficiency and advanced nano sheet-based transistor designs, for its upcoming A16 process node. The Taiwanese chipmaker also seems to be relying on Super Power Rail backside power delivery, where the power is supplied via the backside of the chip, to boost the performance of its products for AI workloads.
This will be interesting. Intel was late with EUV due to BK’s ‘I don’t know if the tech will ever be ready’ stance and TSMC led, and here TSMC is passing on High-NA EUV for a round and Intel will lead. Man, @PGelsinger has burned the boats and is going for it. https://t.co/mv0FHzzqms
— Patrick Moorhead (@PatrickMoorhead) April 26, 2024
This brings us to the crux of the matter. Each High-NA EUV lithography machine from ASML costs around $385 million. The machine's prohibitive cost is likely to be an important consideration for TSMC's reluctance to go all-in on this technology.
In doing so, however, TSMC risks repeating Intel's mea culpa of sorts when it decided to maximize its bottom-line metric by withholding the expenditure of its then-copious financial resources on newly introduced EUV lithography. At the time, TSMC had gone all-in on EUV lithography and, as a result, continues to reap the rewards of its smart gambit to this day.
Of course, this time around, Intel's Pat Gelsinger has staked the very survival of his company on achieving an insurmountable lead in the emerging field of High-NA EUV lithography, which promises unparalleled resolution that iterative updates to the overall EUV lithography process can't match. The fact that American taxpayers would be footing a significant portion of the associated costs had to have figured in Intel's risky gambit, especially as the Biden Administration's CHIPS Act funding has served to socialize these costs for the erstwhile chipmaking behemoth.
