Intel Is Getting Closer to a Comeback – Advanced Micro Devices (NASDAQ:AMD)

In 2009, Advanced Micro Devices Inc. AMD decided to abandon the production of its own integrated circuits and turned to Taiwan Semiconductor Manufacturing Company TSMFast forward, with long delays and errors, Intel Corporation INTC ended up with worse production technology. But that’s going to change this year.

Intel has opened up to outsourcing services to TSMC.

Intel has launched products on its Intel 4 and Intel 3 process nodes, but neither can match TSMC’s top-of-the-line. However, Intel will use TSMC’s advanced 3nm process node in its Lunar Lake laptop processors. AMD is using the same process node in its Ryzen AI laptop chips, which are set to be released this month.

Intel is expected to close the gap with Intel 20A, which it will use in this year’s Arrow Lake desktop processors, and Intel 18A, which will be ready early next year. Panther Lake will use Intel’s 18A process and is expected to launch in 2025. Simply matching TSMC in production means AMD’s competitive advantage will shrink.

Intel’s ambition is to become the second largest foundry in the world.

Becoming a foundry, and a world-class one at that, is an expensive undertaking, but for now, Intel is rising to the challenge. Intel has shown that it is on track to achieve the ambitious goal by the end of the decade, under the leadership of CEO Pat Gelsinger. Gelsinger’s bold plan has been dubbed IDM 2.0, with IDM standing for Integrated Device Manufacturer, to describe Intel’s new identity as a semiconductor company that both designs and manufactures integrated circuits. Included in his bold goals is a promise to deliver five new process nodes over the next four years, helping Intel regain its position as a leader in process technology.

New competition appears.

In a history as old as time, Intel and AMD enjoyed a duopoly in the PC processor market. But that began to change when Microsoft Corporation MSFT I chose processors from Arm Holdings plc ARMThe world’s leading mobile processor designer. Arm has no significant competitors in its core market, as its dominant chip designs are used in almost all premium smartphones. However, Arm is gradually reducing its dependence on smartphones by designing new chips for the cloud and automotive markets. In addition to this higher-growth sector, Arm is also anticipating growing demand for its AI-optimized Armv9 chip designs, which will drive its near-term expansion in the smartphone, cloud, and automotive sectors. For fiscal 2025, Arm expects revenue to grow from 18% to 27% and adjusted earnings per share from 14% to 30%, showing that its intention to gradually diversify its business is on track. Even Intel entered into multi-generational cooperation last year. Together, Intel and Arm are optimizing the design technology of Intel’s 18A process and Arm’s chips.

Intel’s long-term plan is to become a foundry powerhouse in the era of AI.

AMD’s advantage over Intel looks set to disappear. While there were reasons to doubt Mr. Gelsinger’s ambitious vision, Intel appears to be on track to executing this monumental change. If Intel rises to the challenge, this transformation will undoubtedly take Intel to new heights and change the long-term

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This article is from an unpaid outside contributor. It is not a report by Benzinga and has not been edited for content or accuracy.