Despite a long list of issues plaguing chip giant Intel (INTC 5.68%), the company has made meaningful progress catching up to TSMC in semiconductor manufacturing. Intel was stuck on its heavily delayed 10 nanometer (nm) process for a long time, which caused all sorts of problems on the product side of the business. The Intel 4 and Intel 3 process nodes, which are used for Meteor Lake PC CPUs and the latest generation of Xeon server CPUs, respectively, were big upgrades for Intel.
Intel previously canceled the Intel 20A process, which was meant to be a stepping stone to develop important new technologies. For its latest PC chips, Intel turned to TSMC instead of using the Intel 20A process as it reallocated resources to Intel 18A. The Intel 18A process, the final node in the company's original foundry roadmap, is supposed to bring Intel back to parity with TSMC in terms of performance and efficiency.
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Intel 18A has arrived
According to a page on Intel's website, the Intel 18A process is now ready. It's important to understand what "ready" means here. Development of the process is complete, but it will still take time for chips to start rolling out of Intel's factory at high volumes. Intel noted that foundry customer tape outs will begin during the first half of this year. The tape out is the final stage of the design process, with the next step being manufacturing.
The Intel 18A process comes with two features that will drive performance and efficiency gains compared to Intel 3. First, Intel 18A uses a new transistor design called RibbonFET, replacing the previous FinFET architecture that was introduced in 2011. The move to RibbonFET will improve performance per watt and reduce power leakage, along with other benefits.
Second, Intel 18A is the first process from any foundry that supports backside power delivery. Intel's flavor of this technology, called PowerVia, moves certain components to the backside of the die to improve the efficiency of power distribution. PowerVia alone will deliver a meaningful bump in performance.
Intel claims that Intel 18A delivers a 15% improvement in performance per watt compared to Intel 3, along with a 30% bump in chip density. How Intel 18A stacks up against TSMC's top-tier process nodes remains an open question, but at the very least, Intel 18A should close the gap significantly.
Meaningful revenue will take a while
Don't expect all that much external foundry revenue from Intel 18A until 2026. Intel has previously indicated that ramping up to high-volume production will be a process that will extend into next year. The company has a few big-name customers for Intel 18A already lined up, including Microsoft, but it will take time for Intel to build up capacity.
Panther Lake, Intel's next-generation laptop CPU family, will likely act as the debut for the Intel 18A process in a high-volume product. The company plans to ship Panther Lake by the end of the year, with volumes likely ramping up into 2026. Later in 2026, Intel plans to use the Intel 18A process for its Clearwater Forest server CPU.
With Intel 18A ready for production, Intel now needs to find more customers and fill its planned production capacity with new orders. That involves winning the trust of chip designers at a time when Intel's future is very much up in the air. Rumors of potential spin-offs, acquisitions, and mergers are creating a complicated picture for potential customers.
If the Intel 18A process lives up to the company's promises and matches TSMC in terms of performance and efficiency, it would mark an incredible turnaround for the manufacturing side of the business. It will likely take until 2026, though, for this achievement to benefit Intel's financial results. Intel investors will need to remain patient.
