Chip giant Intel(NASDAQ: INTC) is investing billions of dollars in building its own foundry business. The real payoff won't come until 2025 at the earliest when its Intel 18A process node, expected by Intel to be the best in the industry, enters full-scale production. In addition to the Intel 18A process, the company's foundry arm advertises the cost-effective Intel 16 process for chips that don't need cutting-edge manufacturing tech, as well as the upcoming Intel 3 process.
Intel Foundry doesn't appear to offer the Intel 4 process as an option. Intel 4 will be used to manufacture the company's own Meteor Lake laptop chips, which are set to launch in December, but nothing else on Intel's PC or server roadmaps make use of the process.
It turns out that at least one other product is using Intel 4. Swedish telecommunications company Ericsson announced in November that its latest family of radio-access network chips, which are used by communications-service providers, are manufactured using the Intel 4 process. It's unclear whether this was a true design win for Intel Foundry, given that Intel 4 doesn't seem to be on the menu, or if Intel was involved in the design process. Either way, it's a win for Intel's manufacturing ambitions.
Just the beginning
While the news that Ericsson was using the Intel 4 process for its RAN chips was a surprise, the two companies struck a deal earlier this year to manufacture future Ericsson chips using the Intel 18A process. Under the agreement, Intel will manufacture future 5G SoCs for Ericsson using the Intel 18A process, and the two companies will collaborate to optimize Intel's latest Xeon server central processing units (CPUs) for Ericsson's Cloud RAN solutions.
The Intel 4 process, which the company used to refer to as its 7nm process, will be the first from Intel that uses extreme ultraviolet (EUV) lithography, a technology capable of printing much smaller patterns than previous lithography technologies. Intel 3 will be a refined version of Intel 4, bringing improvements in power efficiency.
The Intel 20A and Intel 18A processes introduce additional innovations. Both processes will feature backside-power delivery, which moves the wires that deliver power to the chip below the transistor layer. This approach promises to boost performance on top of the performance gain delivered by shrinking the size of the transistors. Intel will be the first manufacturer to use backside-power delivery when the Intel 20A process is ready in 2024. These two processes will also use a new transistor design called RibbonFET.
Assuming Intel can maintain its roadmap and launch these processes on time, the company will be in a great position in 2025 to compete for business from leading chip designers. Ericsson is already on board for the Intel 18A process; Intel and Arm are collaborating to optimize Intel 18A for future Arm-based chips; and Intel has announced three unnamed customers for Intel 18A, including one that made a large prepayment.
The Ericsson chips manufactured on Intel 4 may not move the needle for Intel's foundry business, but they do represent a vote of confidence in the company's ability to deliver process nodes on time for its customers. The real test will be in 2025 and beyond when Intel 18A and future process technologies go toe-to-toe with foundry market leader TSMC.
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Timothy Green has positions in Intel. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel and long January 2025 $45 calls on Intel. The Motley Fool has a disclosure policy.
