Intel Foundry Struggles with Low 18A Process Yield Rates Reportedly at Only 10%, Hindering Mass Production

Intel’s latest 18A manufacturing process, characterized as a crucial milestone for Intel Foundry, is reportedly facing a staggering yield rate of just 10%, causing upheaval in the markets.

Challenges Intensify for Intel Foundry: A Potential Division Sell-Off Looms

Intel, often referred to as Team Blue, is grappling with unprecedented challenges across its divisions, particularly within Intel Foundry, a key component of the company’s strategy aimed at economic recovery. The latest developments suggest that the foundry’s anticipated 18A process is encountering significant adoption hurdles in the market, primarily driven by intense competition and underwhelming performance. A recent report from the Korean media outlet Chosun reveals that the yield rate for the 18A process has plummeted to below 10%, hindering its capability to achieve mass production.

Although this figure may seem incredulous, it may represent the harsh realities currently facing Intel. Sources indicate that Broadcom, identified as a key customer for Intel’s Integrated Foundry Services (IFS), has expressed dissatisfaction with the 18A process. Engineers at Broadcom claim that Intel’s offerings are far from ready for high-volume production, which directly correlates with the disappointing yield rates. Reports now suggest that Broadcom has chosen to cancel its orders and is actively seeking alternative suppliers.

Intel CEO Pat Gelsinger presents the first 18A Panther Lake sample to Lenovo

The low yield rates and ongoing challenges with the IFS have been pivotal in prompting significant organizational changes at Intel. Allegations have arisen suggesting that CEO Pat Gelsinger’s recent departure from his post was influenced by these factors, along with Intel’s failure to secure substantial governmental subsidies—a decisive nail in the coffin for his tenure. Current developments indicate that without a turnaround, Intel Foundry may be on the brink of a significant restructure or sell-off.

While Intel continues to battle setbacks, rival TSMC appears to be solidifying its industry position. Although slightly trailing in node size, TSMC’s N2 (2nm) process reportedly outperforms Intel’s 18A due to superior SRAM density, a crucial metric in assessing node efficiency and overall performance, according to findings by Tom’s Hardware. This advantage enables TSMC to maintain its competitive edge in the semiconductor landscape.

As Intel navigates this tumultuous period, the exit of a key IFS supporter could shift the company’s strategic focus from the foundry sector towards its manufacturing and product divisions, raising the prospect of a sell-off or merger in the IFS sector.

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