Intel’s CEO talked about getting rid of the 40% discount from TSMC
06.11.24
Intel CEO Pat Gelsinger’s recent comments about the risks associated with Taiwan have affected the relationship between Intel and TSMC (Taiwan Semiconductor Manufacturing Company), the world’s largest semiconductor supplier. Prior to Gelsinger’s public statements, TSMC offered Intel favorable terms for 3nm chips, providing a 40% discount on the production of one wafer, which reduced its cost from $23,000 to $14,000. However, after Gelsinger began to insist on the geopolitical risks of manufacturing chips in Taiwan and advocate for subsidies for the development of semiconductor manufacturing in the US, relations between the companies have become strained. TSMC withdrew the offer, and now Intel is forced to pay full price for 3nm wafers, which significantly hit the financial indicators.
Gelsinger’s comments also led to a public falling out with TSMC founder Morris Chang, who responded sharply to the criticism, pointing to the emotional nature of Gelsinger’s remarks and their motivation for his pursuit of Intel subsidies. Gelsinger’s position also caused internal rifts at Intel, including the rejection of a major deal with Alphabet after paying a fine to settle the dispute.
In addition, there is growing doubt among Intel’s customers and suppliers about the company’s readiness to launch its 18A process by 2026. That jeopardizes Intel’s plans to attract major customers such as Qualcomm and Apple, which have backed out of the process due to concerns about timing and quality. These issues could increase pressure on Intel in its efforts to regain leadership in the semiconductor industry and compete with giants such as TSMC.
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