TSMC will not build more capacity for Intel

Over the past week, it was revealed that Intel is going to tap TSMC for more chips as part of a "contingency plan". Following years of struggles with getting 10nm out of the door, Intel is now also having severe issues with 7nm.

The chip giant said yields of 7nm products are about one year behind where they should be according to internal projections, which means Intel's 7nm products are facing big delays.

Outsourcing more production to TSMC is a solution but the latter doesn't believe this business will be permanent. A new report from DigiTimes claims TSMC does not view Intel as a long-term client. As such, TSMC will not build extra production capacity to supply Intel with chips.

TSMC internally does not consider orders for Intel's processors as long-term ones, and therefore is unlikely to build additional production capacity for the new contract, according to industry sources.

This is potentially bad news for other TSMC clients like AMD and NVIDIA, which will be vying for the same production capacity.