30% of Intel Chips Made by TSMC, Foundry Spin-Off Possible

At the Citi Global Technology, Media & Telecom Conference on September 4, Intel CFO David Zinsner highlighted that about 30% of Intel's chips are currently manufactured by TSMC, stressing that the company will continue to rely on TSMC as a critical partner. He noted that this reliance will fluctuate depending on product strategies and foundry performance, but TSMC's role in supporting chips like Lunar Lake and Arrow Lake remains indispensable.

Zinsner added that although Intel's outsourcing percentage may gradually decline, it still stands much higher than a decade ago. When asked about the possibility of spinning off Intel's foundry business to attract outside investment, he said it's not likely in the near term since the unit isn't yet positioned as an investable business, though it could become a reality in the future.

On advanced nodes, he explained that Intel previously invested ahead of demand, which wasn't beneficial. However, CEO Pat Gelsinger is becoming increasingly confident in the 14A process, even though it carries higher costs than 18A due to the use of High-NA EUV lithography.

The CFO also touched on U.S. government involvement, noting Intel has yet to receive $5.7 billion in subsidies, while $2.2 billion already granted comes with clawback provisions. A planned 10% government stake, he said, helps eliminate uncertainty.

Zinsner confirmed that Intel's divestment of its Altera programmable chip unit will close in the coming weeks, adding $3.5 billion in funding, with further investment from SoftBank expected by the end of Q3.