TAIPEI (Taiwan News) — Intel is expected to manufacture most of the computing components for its upcoming Nova Lake-S desktop processors internally, reducing its reliance on TSMC, according to a report by investment bank KeyBanc Capital Markets.
Nova Lake-S is the code name for Intel’s next-generation desktop processors, which are designed for personal computers and are expected to launch later this year or next year. The company had originally planned to split production of the chips’ compute tiles between TSMC's 2-nanometer process and its own 18A technology, according to CTEE and Wccftech.
Under the initial plan, TSMC was expected to produce about 60-70% of the compute tiles, the key processing components of the chips, while Intel would handle the remaining 30-40%. However, supply chain information cited in the KeyBanc report indicates Intel has decided to shift most compute tile production back to its own manufacturing facilities.
TSMC’s share of Nova Lake production using its 2 nm process is now expected to decline to 10-20%. Intel’s 18A process, a next-generation manufacturing technology roughly equivalent to the 1.8-nm class, is set to become the primary manufacturing technology for the chips, according to Yahoo Finance.
Nova Lake had previously been viewed as a major future customer win for TSMC’s 2 nm production. While Intel’s decision could reduce the number of orders available to TSMC, institutional investors believe the impact on the Taiwanese chipmaker will be limited.
TSMC continues to face strong demand for its 2 nm capacity from major customers including Apple, Nvidia, and Advanced Micro Devices. Counterpoint Research said TSMC accounted for 73% of the global foundry market in the first quarter, maintaining its dominant position.
Intel’s potential move also suggests progress in improving the production maturity and yield rate of its 18A process. The process is considered a key milestone in Intel’s effort to rebuild its competitiveness in advanced semiconductor manufacturing.
ASML recently announced that Intel had successfully introduced its High NA EUV (high numerical aperture extreme ultraviolet) lithography systems into volume production for the 18A process. The advanced lithography equipment has already been used to manufacture some Panther Lake processors, making Intel the first chipmaker to apply the technology in mass production.
Intel currently has a monthly production capacity of about 30,000 wafers for the 18A process. It plans to expand capacity further to support demand for Nova Lake processors and AI PCs.
