Intel Is Getting Closer To Staging Its Comeback

Back in 2009, Advanced Micro Devices Inc AMD decided to give up on manufacturing its own chips and turned to Taiwan Semiconductor Manufacturing Company TSM. Fast forward, with long delays and missteps, Intel Corporation INTC ended up with inferior manufacturing technology. But, this is set to change later this year.

Intel opened up to outsourcing to TSMC.

Intel has launched products on its Intel 4 and Intel 3 process nodes, but neither can compare to TSMC's best. But, Intel will be using TSMC's advanced 3nm process node for in its Lunar Lake laptop CPUs. AMD is using the same process node for its Ryzen AI laptop chips that are scheduled for release this month.

Intel is expected to close the gap with Intel 20A, which it will use for this year's Arrow Lake desktop CPUs, and Intel 18A, which will be ready early next year. Panther Lake will use the Intel 18A process and is expected to launch sometime in 2025. Simply matching TSMC in manufacturing means AMD’s competitive edge will diminish.

Intel is aiming to become the world's second-largest foundry.

Becoming a foundry and a world-class one is a costly endeavour, but for now, Intel is rising to the challenge. Intel showed it is on track to reach its ambitious goal by the end of the decade, under the leadership of CEO Pat Gelsinger. Gelsinger’s bold plan has been named IDM 2.0, with the IDM standing for Integrated Device Manufacturer to describe Intel’s new identity of a semiconductor companies that both designs and manufactures chips. Embedded in its bold goals is also the promise to deliver five new process nodes in four years that will help Intel regain its process technology leadership.

New competition is looming.

During a tale as old as time, Intel and AMD have been enjoying the PC CPU market duopoly. But that began to change when Microsoft Corporation MSFT chose CPUs from Arm Holdings plc ARM, the world's leading designer of mobile CPUs. Arm itself doesn't face any meaningful competitors in its core market as its dominant chip designs are used in almost all premium smartphones. But, Arm is gradually lowering its dependence on smartphones by designing new chips for the cloud and auto markets. Besides this higher growth sector, Arm also anticipates the rising demand for its higher-royalty AI-optimized Armv9 chip designs to fuel its near-term expansion across the smartphone, cloud, and auto sectors. For fiscal 2025, Arm expects its revenue to grow from 18% to 27%, with adjusted EPS increasing from 14%-30%, showing its intent to gradually diversify its business is on track. Even Intel entered a multigeneration collaboration last year. Together, Intel and Arm are co-optimizing the design technology of the Intel 18A process and Arm’s chips.

Intel’s long game is to become a foundry powerhouse in the AI era.

By the looks of it, AMD’s edge over Intel is set to vanish. While there were reasons to be doubtful of of Mr. Gelsinger’s ambitious vision, Intel seems to be schedule with the execution of this monumental shift. If Intel rises to challenge, this transformation will undoubtedly propel Intel to new heights and change the long

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