Intel vs. TSMC: The Battle for Semiconductor Supremacy Heats Up

Intel's recent challenges have seen TSMC take the crown as the world’s most advanced semiconductor manufacturer. Now that Intel has regrouped and redoubled efforts, Intel is confident that it will regain this crown in 2025 with its 18A process. What challenges has Intel faced, what has Intel said about its 1.8A process, and can Intel reclaim this title?

What challenges has Intel faced?

It’s no secret that Intel has encountered numerous obstacles over the last decade, even losing the crown as king of all semiconductor manufacturers to TSMC. Since its inception, Intel has consistently been at the absolute forefront of both semiconductor fabrication and CPU design. Despite the development of cheaper processor technologies by other companies, none could compete with the x86 architecture, a widely-used set of instructions in computing, and its use in the early IBM machines ensured Intel’s success.

One major advantage for Intel has been its dual role: it both designs and manufactures CPUs. This means they can optimise their designs based on their own manufacturing strengths. This insider knowledge led to Intel tying processor design to future process nodes, which worked extremely well for decades.

However, when Intel faced challenges in delivering its 7nm process node, all processors based on that technology could not be manufactured, allowing other companies, such as AMD, to take the lead. To make matters worse, TSMC developed its 7nm process node ahead of Intel, establishing itself as a leader in semiconductor fabrication. In fact, the situation for Intel was so dire that it had to place orders for its own processors from TSMC while Intel fixed its 7nm issues.

The COVID pandemic of 2020 struck Intel with numerous difficulties, including supply chain shortages, access to workers, and unpredictable markets. However, as Intel wasn’t the only manufacturer faced with these unexpected challenges, Intel was able to use this time to advance progress in some of its projects.

Intel's Strategic Response to Industry Shifts

To add to Intel's challenges, Apple chose to replace Intel processors with its own custom-designed ARM core, made by TSMC. This meant Intel lost a significant client. Furthermore, this move sent a strong message to the industry that Complex Instruction Set Computing (CISC) processors, like x86/x64, may not be the future of computing, thus risking Intel’s position as a world leader in processor design.

In recognition of these challenges, Intel has undergone some major restructuring along with changes in its design practices. For example, Intel has made efforts to decouple its processor designs from its process node so that new processor releases can still occur even if a new node isn’t ready. Additionally, Intel has also opened up many of its foundry services to the market in an effort to increase revenue (thus allowing more R&D to be invested in developing next-generation technologies).

As of 2023, TSMC remains a dominant force in the semiconductor industry. Intel's endeavours to reclaim its leading position are evident in its strategic shifts and innovations.

From an electronic engineering perspective and having closely followed the semiconductor industry's evolution, it's evident that Intel's journey has been marked by both highs and lows. Their resilience and commitment to innovation, however, have always stood out.

According to a recent report from Tokenist, Intel's shares have surged by 42% year-to-date. This surge in confidence from investors is attributed to Intel's promising foundry strategy.  The geopolitical tensions between the US and China position Intel as a potential hedge against escalating chip wars. 

Intel to retake crown in 2025 with 18A process

Recently, Intel announced that it will be taking back the crown from TSMC in 2025 with its 18A process node. According to Intel, during this time, TSMC and Samsung will be working on 2nm processes, while Intel aims to achieve an 18A process node, equivalent to 1.8nm. This advancement promises improved energy efficiency and faster transistor switching speeds, which in layman's terms, means more efficient and faster chips.  

In addition to this plan, Intel also announced that an anonymous customer has already prepaid for 18A contract manufacturing capacity, providing Intel with a significant confidence boost. As such, Intel is able to increase its R&D on developing the 18A process node and establishing suitable foundries.

Demystifying Process Nodes

Having closely followed the semiconductor industry's evolution, I've noticed that the term "process node" often raises eyebrows. It's a term that has evolved over time and, in recent years, has become a bit ambiguous. Traditionally, the process node referred to the physical size of the transistors used in a chip. However, with advancements in technology, this definition has blurred.

Today, one manufacturer might define a process node by the width of a transistor gate, while another might use the smallest feature size. This means that a "smaller" node might not necessarily pack more transistors than a "larger" one. It's a bit like comparing apples to oranges, and it's crucial for tech enthusiasts and investors to understand these nuances.

From my perspective, while these technicalities are essential, what truly matters is the performance, energy efficiency, and overall capabilities that a process node brings to the table. And in this race, Intel's ambitious 18A process node promises to be a game-changer.

Readers should note that, despite the promising advancements, the semiconductor industry remains complex. We base the information presented here on current data and trusted industry sources. However, various factors can rapidly change the landscape. 

If Intel can achieve this goal, it’s possible for customers such as Apple to return to Intel. Considering that smaller nodes are especially important for mobile devices (due to improvements in energy efficiency), TSMC is at risk of losing its existing mobile customers to Intel.

Intel's commitment to sustainability and eco-friendly manufacturing processes stands out as a significant initiative. As the world grapples with climate change, companies that prioritise eco-friendly practices will likely gain a competitive edge. Intel's commitment to reducing its carbon footprint while pushing the boundaries of semiconductor technology is commendable and could play a role in its bid to reclaim the top spot.

Intel's Bid to Reclaim Leadership

Recent data indicates a 42% surge in Intel's shares year-to-date, largely attributed to its promising foundry strategy. As geopolitical tensions rise, especially between the US and China, Intel's strategic positioning becomes even more crucial in the global semiconductor landscape.

When it comes to semiconductor manufacturing, there is no doubt that Intel is a legend, but whether or not it can retake the crown from TSMC depends on a multitude of different factors. Just like how Intel struggled with its 7nm process, it is possible that something could prevent Intel from launching its 18A technology, such as supply chain challenges, unforeseen manufacturing difficulties, or even major political shifts. 

However, the new foundry business from Intel has certainly changed the mindset of Intel, and its increase in popularity will see rising revenue streams that will provide all the R&D funds that Intel needs. Intel certainly has the potential to regain its leading position, but the future developments in the semiconductor industry will determine the outcome.

In Conclusion

The semiconductor industry remains one of the most dynamic and rapidly evolving sectors. Intel's journey, characterised by both challenges and innovations, showcases its commitment to the semiconductor industry. As they gear up to introduce groundbreaking technologies, the industry and tech enthusiasts worldwide will be keenly watching. Whatever the outcome, the advancements in this field promise exciting times ahead for technology and its myriad applications in our daily lives.