“I’ve bet the whole company on 18A,” Intel CEO Patrick P. Gelsinger said in an interview earlier this year. This statement highlighted the critical importance of Intel’s 18A process technology, not just for the company’s future but potentially for the entire chip industry.
Intel 18A represents the culmination of the company’s ambitious “five nodes in four years” strategy, which aims to regain process leadership by 2025. This manufacturing process uses technologies like RibbonFET gate-all-around transistors and PowerVia backside power delivery, from which Intel promises significant improvements in performance and efficiency.
It’s not just about technological advancement; it’s about reclaiming Intel’s position as a leader in chip manufacturing and establishing a strong foothold in the foundry business. This is their biggest innovation since Intel introduced FinFETs to HVM in 2011. Intel Foundry Services (IFS) is banking on 18A to attract customers and compete with industry giants like Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung.
However, 18A’s potential extends beyond consumer electronics. Intel has secured contracts with the US Department of Defense for the RAMP-C program, which aims to establish a domestic source for leading-edge semiconductor manufacturing. Boeing and Northrop Grumman have recently joined this program, highlighting the strategic importance of 18A for national security.
Why is it critical for Intel’s Foundry Business?
Intel, once the undisputed leader in semiconductor manufacturing, found itself in the position of relying on its competitor, TSMC, for chip production. This dependence was a result of Intel’s struggles with its own 7nm process node, which allowed TSMC to take the lead in advanced chip manufacturing. As one Hacker News user noted, “Intel flopped so hard on process nodes for four years up until Gelsinger took the reigns… it was honestly unprecedented levels of R&D failure.”
Intel faced a major setback in its 7nm chip production due to a “defect mode” in the process, pushing back the release of 7nm chips from late 2021 to early 2023. As a result, Intel’s yields for 7nm chips fell roughly a full year behind schedule and it has now been renamed to Intel 4.
Hence, the 18A process is Intel’s opportunity to regain its technological edge and reduce its reliance on external foundries. By successfully implementing both RibbonFET gate-all-around transistors and PowerVia backside power technology, Intel aims to leapfrog competitors and attract high-profile customers.
Due to these improvements and continuous efforts, Intel has signed multiple deals with big tech companies including Amazon Web Services (AWS), which has entered into a multi-year, multi-billion-dollar contract with Intel.
This deal includes the production of an AI fabric chip for AWS using Intel’s 18A process, as well as a custom Xeon 6 chip on the Intel 3 process. This collaboration aims to enhance AWS’s cloud infrastructure and AI capabilities, empowering joint customers to run any workload and unlock new AI capabilities.
The partnership also has strategic implications, supporting the growth of a sustainable domestic AI supply chain in the US. As part of the deal, AWS plans to invest $7.8 billion to expand its data centre operations in Central Ohio.
Microsoft is another big customer besides AWS. While the specific product hasn’t been identified, it could be related to Microsoft’s recently announced plans for custom-designed chips, including a computer processor and an artificial intelligence accelerator.
At Intel Foundry Direct Connect, Satya Nadela, CEO of Microsoft, mentioned, “We are in the midst of a very exciting platform shift that will fundamentally transform productivity for every individual organisation and the entire industry.”
While explaining further, Nadela mentioned that to achieve this vision, Microsoft needs a reliable supply of the most advanced, high-performance and high-quality semiconductors. That’s why Microsoft chose a chip design that we plan to produce on the Intel 18A process. The deal with Microsoft is substantial, with Intel Foundry’s expected lifetime deal value being greater than $15 billion in total across its wafer and advanced packaging segments.
Execution Delays Overshadow Ambition
TSMC says 18A is similar to its N3P node, and Intel says it is similar to TSMC’s N2 node. The truth is probably somewhere in between, in which case it is going to be a good node. A Reddit user mentioned that Intel’s challenge will be making its price competitive with TSMC’s offerings and actually being able to produce vast volumes of it if they ever wish to attract a whale client like Nvidia or Qualcomm.
Apparently, Intel has a negative reputation for overpromising and underdelivering. A Reddit user mentioned that Intel has damaged its credibility for decades through its use of salami tactics—admitting things bit by bit only when they become undeniable.
This behaviour is especially evident when it comes to nodes, processes, yields, and general foundry-related matters. They’ve consistently harmed their own trustworthiness with their statements. They repeatedly announce new plans suddenly when deadlines approach, alongside their endless series of delays.
On the other hand, Intel’s position as a leading-edge foundry would make it the most strategically important company in America. If the US government wanted to build AI research facilities, Intel would likely get the contract because its headquarters, leading-edge foundries, and all of its leading-edge research are based in the US, safe from China and North Korea.
Divesting from fabrication plants (fabs) would be a huge mistake as they would forever be competing with AMD, Apple, and Nvidia on TSMC wafer allocation. TSMC, by all means, would raise the price with a lack of competition from Samsung.
The company expects external customers to tape out their first 18A designs in the first half of 2025, with enterprise production anticipated in early 2026.
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