What happened
Shares of Taiwan Semiconductor Manufacturing Company (TSM +0.40%) surged on Friday, likely in response to Intel's (INTC 2.20%) disclosure that its 7nm manufacturing process would be delayed. Shares of TSMC were up 11.2% at 12:30 p.m. EDT, while shares of Intel were down more than 15%.
So what
Intel has been having execution problems for years. Its 10nm manufacturing process was chronically delayed, and the company is still shipping mainstream products built on versions of its 14nm process. The company's latest desktop processors, which launched in the second quarter, are 14nm parts.
Image source: Getty Images.
Intel's delays didn't matter much until rival Advanced Micro Devices staged a comeback with its Ryzen PC chips and EPYC server chips. The latest generations of both chips use a 7nm manufacturing process from TSMC. AMD has been shipping 7nm parts since mid-2019.
When Intel reported its second-quarter results on Thursday evening, the company disclosed that its 7nm process is behind schedule. Intel said its 7nm CPU product timing has shifted back about 6 months and that yields for the process are about 12 months behind internal targets.
Now what
Intel's problems on the manufacturing front will make it more difficult for the company to limit how much market share AMD steals. Intel's products are still competitive, and the company has retained an advantage when it comes to single-threaded performance. But that advantage is the smallest it's been in years.
Because AMD relies on TSMC to manufacture its processors, AMD's success is TSMC's success. As AMD continues to win market share, TSMC will benefit from the chip company's comeback.
