Intel Outsources 30% of Wafer Production to TSMC

Intel's semiconductor manufacturing strategy remains reliant on external partners, with approximately 30% of its wafers currently outsourced to TSMC, according to John Pitzer, Intel's Vice President of Investor Relations. This marks a significant shift from the company's previous plans to eliminate dependence on external foundries, as Intel now embraces a long-term multi-foundry model.

“This may be a high-water mark for us,” Pitzer stated during a recent investor discussion with Morgan Stanley analyst Joe Moore. “But I think a year ago, we were talking about driving it to zero as quickly as possible. That is no longer the strategy.” He emphasized that Intel now regards TSMC as “a great partner,” with the collaboration fostering healthy competition between TSMC and Intel's own foundry operations. The company is currently evaluating the optimal long-term outsourcing ratio, with a target of 15-20% of total wafer production.

This strategic shift coincides with leadership changes at Intel, where interim CEO Dave Zinsner and Michelle Johnston Holthaus have been given expanded decision-making authority. The company remains committed to its dual approach of developing both a world-class fabless business and a leading-edge foundry. Executives are prioritizing product competitiveness before fully optimizing foundry operations—a pragmatic approach that acknowledges the complexities of semiconductor manufacturing.

Intel's willingness to leverage TSMC's advanced process technologies reflects both the practical needs of its manufacturing transformation and its strategic flexibility. While the company remains committed to long-term manufacturing self-sufficiency, this objective will be balanced with product competitiveness and time-to-market considerations.