The Taiwanese semiconductor manufacturer TSMC (NYSE: TSM) has reportedly renewed its supplier relationship with Intel (NASDAQ: INTC) by signing a new deal. TSMC has previously been a significant contract chipmaker for Intel in the semiconductor market, which is experiencing major shortages.
The news comes just days after Intel disclosed its plans to drastically ramp up domestic chip production with a $19-20 billion capital spending program through 2024. It intends to implement the costly ‘extreme ultraviolet lithography (EUV) technology’, increasing the chips’ processing power.
Moreover, Intel is planning to enter the foundry business, which means manufacturing other companies’ chip designs, and would therefore enter direct competition with TSMC.
Despite this, while Intel is ramping up production, TSMC remains the market leader in the foundry business. Especially concerning small-wavelength chips (10nm-5nm), built with EUV, TSMC continues to dominate with 90% market share in 2020.
With the on-going chip shortage affecting various industries, do you think Intel’s strategy will succeed? Drop your thoughts down below!