Intel has confirmed that its forthcoming desktop chip, Arrow Lake, will not be manufactured in-house, following a similar decision for its Lunar Lake Core Ultra chip. While this might raise concerns, it’s unlikely to delay the chip’s launch or affect key specs like clock speeds. The move to use external manufacturing partners, such as TSMC, will, however, increase production costs, though it remains unclear if consumers will feel the impact.
This shift represents a major departure from Intel’s long-standing tradition of producing its own chips. CEO Pat Gelsinger explained that the change, which began with Lunar Lake, now extends to Arrow Lake. While it’s a practical decision, it’s also a point of pride for a company that has historically handled its own manufacturing.
Intel’s decision can be seen through two lenses. On the optimistic side, the company originally planned to build Arrow Lake on its 20A process but is now advancing to the more sophisticated 18A process ahead of schedule. This accelerated timeline supports Intel’s claim that its “five nodes in four years” initiative is progressing even faster than expected: “With this decision, the Arrow Lake processor family will be built primarily using external partners and packaged by Intel Foundry,” according to Intel.
However, there’s a less rosy perspective as well. Intel has poured billions into its Intel Foundry Services in a bid to compete with TSMC and others, but it has yet to land any significant external clients. Moreover, the company recently announced layoffs and major cost-cutting measures. The reliance on external manufacturing for Arrow Lake may fuel concerns about Intel’s ability to fully recover its once-dominant position in the semiconductor space.
Looking ahead, Intel’s next big milestone will be the 18A process, debuting with the Panther Lake chip in 2025. Although the defect density in 18A is already promising, Intel’s use of external foundries for Arrow Lake casts a shadow over its manufacturing future. Still, the company is hopeful that Panther Lake will solidify its return to form.