Intel invests another $1 billion to increase 14nm capacity

[xiaomo]

Intel is increasing every year in the investment in semiconductor process technology. Recently, it is reported that Intel will invest an additional $1 billion to increase its 14nm capacity.

As we all know, Intel is currently one of the few companies that can independently develop, produce, and manufacture semiconductor chips. In the past few years, Intel's process technology has remained at the 14nm node. Although the speed of moving to the 10nm process is somewhat slow, Intel's technology accumulation at the 14nm process node is more a solid foundation for the 10nm process, in order to make a smoother transition to the 7nm process node.

The main reason for the additional investment is the tight supply of some 14nm process products. Bob Swan, Intel's chief financial officer and interim CEO, pointed out that throughout the year 2018, the industry's demand for Intel's servers and PC chips far exceeded the company's expectations. In the first half of 2018, the company's data center business grew by 23% year-on-year, while cloud business grew by 43% year-on-year. In addition, demand from PCs also increased in the second quarter, which also increased demand for Intel products, so Intel raised its revenue forecast for this year by $4.5 billion in July.

With the growing demand for high-end products such as Xeon processors and Core Core i9, the pressure on Intel's factory network is increasing. From a manufacturing point of view, it is obviously more difficult to produce a 28-core server CPU chip because their physical size is much larger than that of a dual-core or quad-core chip commonly used on PCs. The yield of hundreds of small chips on a single crystal is higher than that of dozens of large chips.

Therefore, in recent months, Intel has to consider giving priority to its high-margin Xeon processors and high-end products such as the Core i9, which is the reason for the tight supply of low-end products in the current 14nm process. Intel's current 14nm supply gap is as high as 50%, which is the biggest uncertainty affecting the performance of the PC market in the second half of this year. According to foreign media Tom "s Hardware, Intel must even use the 22nm process to produce the H310C chipset to release its 14nm process capacity.

Intel originally planned to invest $14 billion in capital spending this year, but then allocated another $1 billion to increase its 14nm wafer fab capacity. Intel is currently investing $1 billion in production sites in Oregon, Arizona, Ireland and Israel to increase production of 14nm chips.

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