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Chip manufacturer Intel Corpration's contract manufacturing plans have apparently been dealt with a setback as wafer tests run by Broadcom's analysts have failed to yield satisfactory results, according to sources quoted by Reuters. These tests covered Intel's leading edge semiconductor technology, 18A, and after Intel shipped its customer the wafers last month, Broadloom's tests concluded that the process technology was not ready to move to high volume production.
Semiconductor production takes place in phases, with high volume production being one of the final stages after chip manufacturers have fine tuned their equipment before feeling comfortable to risk thousands of wafers in production.
Intel Asserts 18A Is On Track To Enter High Volume Production In 2025
Following its disastrous earnings report in August that saw Intel announce a 15% workforce reduction along with a dividend suspension and meek third quarter guidance, the spotlight is even sharper on the firm's contract manufacturing plans. These plans, part of Intel's Intel Foundry Services Business, seek to emulate the Taiwanese TSMC's successes in the semiconductor industry and offer firms such as NVIDIA, AMD and Broadcom a chance to have their chips manufactured by Intel.
According to three sources quoted by Reuters, Intel used its leading edge 18A manufacturing technology to print circuits on wafers sent by Broadcom before sending them back last month. However, after Broadcom evaluated them, its engineers were doubtful of 18A's ability to move to high volume production.
High volume production is typically one of the final stages in the production process , and success on this front would have provided some much needed life for Intel's shares, which are down 58% year to date.
Both Intel and Broadcom responded to Reuters' requests for comments. Broadcom shared that it has been testing Intel Foundry Services' products and these tests remain ongoing with no final conclusions having been reached.
Intel stressed that 18A remains on track for high-volume production in 2025. "Intel 18A is powered on, healthy, and yielding well, and we remain fully on track to begin high-volume manufacturing next year," the company said, adding that it does not comment on specific customer orders.
Reuters' sources hint that the problems might have to do with 18A's yield. A manufacturing technology's yield is the number of usable chips in a wafer, and higher yields are necessary for stable customer partnerships. Yield troubles are also common in the early phases of a chip manufacturing technology, and unsurprising for Intel's 18A which, in marketing terms at least, is the most advanced semiconductor fabrication process in the world.
The firm's Taiwanese rival TSMC aims to produce its 2-nanometer chips in 2025. 2-nanometer, or 2nm, is equivalent to 20A, and a successful 18A ramp in 2025 could provide Intel with a key edge over its Taiwanese rival right at a time when AI chips are becoming some of the most hotly demanded products in the world.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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