[News] Intel May Cut Gaudi 3’s 2025 Shipment Target by 30%, Raising Concerns for TSMC, ASE, and Alchip

---

---

To turn adversity around, Intel launched its latest AI accelerator, Gaudi 3, in late September. However, a report by the Economic Daily News indicates that the struggling giant has significantly slashed the chip’s shipment targets by over 30% for next year, which may severely impact orders for its Taiwanese supply chain.

According to the report, the move could be attributed to the Intel’s internal strategy adjustments and the fluctuation of customer demand, which prompts it to cut orders on Taiwanese companies such as TSMC, ASE Technology, and ASIC firm Alchip.

According to industrial sources cited by the report, Intel originally projected to ship 300K to 350K units of Gaudi 3 in 2025. However, the target has now been revised to 200K to 250K units, marking a reduction of more than 30%.

According to the report, after acquiring Israel-based AI chip company Habana Labs in 2019, Intel seems to be relatively conservative about their co-development of the next-gen AI accelerators. Intel’s cautious attitude is evident from its recent moves, such as expediting the conclusion of previous projects like Gaudi 2, as well as lowering the shipment target for Gaudi 3 next year.

Intel declined to comment on the matter, the report notes.

According to industrial sources cited by the report, the adjustment will pose limited impact to TSMC, which manufactures Intel’s Gaudi 3 with its 5nm node. While the demand for the foundry leader’s advanced nodes remains robust, other customers are expected to quickly fill the gap left by Intel.

In terms of IC packaging and testing services provider ASE and its subsidiary SPIL, as they also have a diversified client portfolio, with major tech companies placing orders, the capacity can be swiftly reallocated to minimize the impact, the report suggests.

Nevertheless, for those with smaller scales and a higher client concentration, the impact may be more significant. Taiwanese ASIC firm Alchip, which provides ASIC design services for Intel’s Gaudi 2 and Gaudi 3, therefore, may be more vulnerable to Intel’s potential shipment reduction, according to the report.

Unimicron, which serves as the primary supplier of substrates for Intel’s chips, may also be impacted by the fluctuation of Intel’s orders, the report notes. However, when asked about the potential impact, the company reaffirms its optimistic outlook regarding the second half of 2024, as it expects the demand for AI accelerators and optical modules to be stronger than the first half.

Currently, NVIDIA still holds the throne in the global AI chip market, with rivals such as AMD and Intel eagerly trying to catch up.

Intel’s latest effort, Gaudi 3, boasts 64 Tensor processor cores (TPCs) and eight matrix multiplication engines (MMEs) to accelerate deep neural network computations, and is specifically optimized for large-scale generative AI, according to its press release. It even claims to offer double the performance at the same cost compared to NVIDIA’s H100, the report says.

Read more

• [News] Intel’s Turnaround Hinges on This? Its First 18A Chip in High-volume Makes Official Debut
• [News] A Quick Roundup of Intel’s Five Core Businesses: Key Moves to Watch Next

(Photo credit: Intel)