Intel may abandon the foundry market

After GlobalFoundries left the cutting-edge foundry market earlier this year, there were only three major players left. TSMC is the largest foundry firm, Samsung is also on the cutting-edge but is having a hard time attracting customers, and Intel's custom foundry business hasn't seen much success either. Now word is going around that Intel may exit the contract manufacturing market.

DigiTimes writes sources in the Taiwanese chipmaking industry say they wouldn't be surprised if Intel leaves this market. The Intel Custom Foundry unit was created eight years ago, it reportedly charges higher prices than competitors and has no major clients or large orders recorded. There was some interest in Intel's 10nm node, but we all know how that played out...

Taiwan's semiconductor firms are not surprised by Intel's possible move of quitting the contrat chipmaking market, a market where the US chip giant has never really shown commitment, said the sources. It entered the market in 2010 mainly to optimize the adjustment of its own manufacturing capacities. In addition, tight 14nm and 22nm capacities have been preventing Intel from taking contract foundry orders.

The sources also cited some reasons behind Intel's failure to perform well in the custom foundry market over the years. First, TSMC alone has grabbed a market share of over 50%, and other leading foundry houses Samsung and GlobalFoundries have been working hard to cement their places. Relatively higher foundry quotes offered by Intel and its weaker supply chain support than those associated with TSMC and Samsung are also among the reasons.