American tech giant on track to take process leadership from TSMC and Samsung Foundry

Believe it or not, a U.S. company that just entered the business of building chips for fabless chip designers, will surpass TSMC and Samsung Foundry and take process leadership from the pair next year. The American company is Intel and, per Reuters, it made that announcement today after it signed Microsoft to be a customer of Intel Foundry. Today marked the first technology conference for the foundry which says that it will build Microsoft's custom chip using its Intel 18A process.

The Intel 18A process node will be equivalent to 1.8nm for TSMC and Samsung Foundry. This year, TSMC and Samsung Foundry will be using its second-generation 3nm process node with plans to start volume production at 2nm by 2025. As the process node gets smaller, the features of a chip, including transistors, get smaller. This allows more transistors to be shoehorned inside a chip making it more powerful and or energy-efficient.

Here's a good example. In 2019 the A13 Bionic chipset powering the iPhone 11 series contained 8.5 billion transistors in each chip. By 2023, the A17 Pro, built using TSMC's N3B 3nm process node, carried 19 billion transistors in each chip.

By 2026, Intel is expected to start production using its Intel 14A process which is equivalent to a 1.4nm chip from TSMC and Samsung Foundry. Intel CEO Pat Gelsinger said in October 2021 that his company would take over process leadership from TSMC and Samsung Foundry by 2025 and it looks like Intel will achieve this a little earlier than it forecast. Samsung Foundry and TSMC are expected to start using their 1.4nm process node in 2027.

Intel says that it has signed four "large" customers for Intel 18A production although those firms were not named and Intel did not reveal whether Microsoft was one of them. GPU and AI chip designer Nvidia reportedly has been kicking the tires on a possible deal with Intel. Currently, the company relies on TSMC to build its chips.

Intel used to build chips for itself only, but after seeing how successful TSMC and Samsung Foundry have been getting paid to build chips for firms without manufacturing facilities (a condition known in the industry as being "fabless"), it decided to launch Intel Foundry. Intel, besides taking process leadership, also has a technology that makes power-gobbling AI chips run faster.

Microsoft Chairman and CEO Satya Nadella explains why his company decided to have its new chip built by Intel. "We are in the midst of a very exciting platform shift that will fundamentally transform productivity for every individual organization and the entire industry,” Nadella said. “To achieve this vision, we need a reliable supply of the most advanced, high-performance and high-quality semiconductors. That’s why we are so excited to work with Intel Foundry, and why we have chosen a chip design that we plan to produce on Intel 18A process."