According to Reuters citing sources, Intel, facing a critical survival crisis, has temporarily halted its new chip packaging and testing project in Penang.

Malaysian media outlet The Star, citing informed sources, reported that Intel will temporarily halt its new chip packaging and testing project in Penang as part of cost-cutting efforts. However, the operations of existing facilities will remain unaffected.

The U.S. chip giant had announced three years ago that it would invest approximately USD 7 billion to build new chip packaging and testing facilities in Malaysia, looking to make it its largest overseas packaging and testing base.

Facing what is described as the most challenging period in its 56-year history, Intel is making drastic survival moves, including suspending dividend payments and laying off 15% of its global workforce to significantly reduce expenses.

Per The Star, Intel employs around 14,000 people in Malaysia, meaning over 2,000 local employees may face the risk of job loss.

Three weeks ago, Penang Chief Minister Chow Kon Yeow stated that Intel would continue its expansion plans in Penang, though he admitted that Intel’s USD 10 billion cost-cutting initiative would inevitably impact its operations in the region.

The Star cited sources, pointing out that Intel has been reassessing its investment projects in Malaysia. While construction at its new facility in Penang is still ongoing, the number of workers has been reduced.

Read more

• [News] Intel’s 18A Reportedly Runs into Trouble with Broadcom, while 20A Plan on Arrow Lake Cancelled
• [News] Intel Reportedly Considering Foundry Spin-Off or Merger to Mitigate Losses

(Photo credit: Intel)

Disappointing financial results. A 15% layoff of its workforce. Restructuring and cost-reduction plans which may include the sale of FPGA unit Altera and freezing its USD 32 billion German fab project. Now, there seems to be more bad news on the way for Intel, as its advanced nodes, specifically 18A and 20A, reportedly run into trouble.

Broadcom Regards 18A Not Ready for High-volume Production

According to Reuters and The Verge, Broadcom’s initial tests with Intel’s 18A (1.8nm-class) process did not meet expectations, creating additional pressure on the semiconductor giant’s efforts to catch up with TSMC in the foundry sector. The reports note that Broadcom tested Intel’s 18A by producing wafers with typical design patterns. However, its engineers and executives were said to be disappointed with the results, regarding the process as “not ready for high-volume production.”

A Broadcom spokesperson informed Reuters that the company has not yet completed its evaluation of Intel’s 18A, indicating that the assessment is still in progress.

The 18A node plays a crucial role in Intel’s roadmap, as it has been working on the process for years, targeting to begin mass production next year, with major clients including Microsoft, according to the Verge.

However, another report from Tom’s Hardware also suggests that a defect density below 0.5 defects per square centimeter is typically seen as a positive outcome, which Intel may have already accomplished. Citing CEO Pat Gelsinger’s previous remarks, the report notes that Intel is now below 0.4 d0 defect density, which can be considered a healthy process.

20 A Cancelled: Not a Bad Idea for Cost-reduction?

Another latest bad news, though, is that Intel announced that it will no longer use its own 20A process for the upcoming Arrow Lake processors aimed at the consumer market. In its own words, the Arrow Lake processor family will be built primarily using external partners and packaged by Intel Foundry.

The unexpected move, according to Intel, is made in order to focus resources on Intel 18A, helping the company to optimize its engineering investments.

The strategy might not be a bad idea amid Intel’s crisis, as the bypass of the 20A process altogether can help avoiding the significant capital expenditures needed to scale the node to full production, a report by Tom’s Hardware notes. By sidestepping the typically high costs associated with ramping up a new and advanced node like 20A, the company will likely make progress toward its cost-cutting objectives. The order of Arrow Lake, though, might possibly go to TSMC, the report indicates.

Read more

• [News] AMD Could Emerge as a Prospective Buyer for Intel’s Potential Sale of Altera
• [News] Intel Reportedly Mulls to Sell FPGA Unit Altera and Freeze USD 32 Billion German Project amid Crisis

(Photo credit: Intel)