Intel's next-gen manufacturing process is reportedly still struggling

Intel is reportedly still struggling with a chipmaking process crucial to its future. Reuters reports that the company's 18A process is still producing low yields and high defect rates. Intel has invested billions of dollars in the manufacturing process, on which it's pinned its hopes of gaining ground on TSMC.

This isn't the first concerning news about 18A. Last year, a report stated that Broadcom was unhappy with the results of a test run for a potential order. However, Intel insisted at the time that 18A was on track to make its upcoming Panther Lake chips at volume later this year. "Our performance and yield trajectory gives us confidence this will be a successful launch that further strengthens Intel's position in the notebook market," Intel said last month.

Intel has typically aimed for a yield of at least 50 percent of usable chips before scaling up production. The company is said to make the bulk of its profit after reaching 70 to 80 percent. Last year, 18A's usable Panther Lake chips had reportedly only reached a five percent threshold. Intel had aimed for 10 percent by this summer. Tuesday's report doesn't state 18A's current yield, only describing it as a small percentage.

In a statement sent to Engadget, an Intel spokesperson said it is pleased with 18A's current state. "We feel very good about our trajectory on Intel 18A, and it will be the foundation of multiple generations of client and server products in the coming years," the spokesperson wrote. "Panther Lake is going to be a great product for Intel and our partners," the company continued, adding that its launch is still on track for later this year.

In a July interview with Reuters, Intel's Chief Financial Officer David Zinsner suggested that 18A's yields were better than reports claimed. He added that yields tend to "start off low and improve over time."

The company's 18A process is a risky bet, combining manufacturing changes with a next-gen transistor design. Intel embraced the challenge with an aggressive timeline that one of Reuters' sources called a hail mary. 18A going well would also help attract business for its upcoming 14A process. Last month, Intel warned investors that it may have to leave chip manufacturing altogether if it doesn't land 14A contracts.

The company needs all the help it can get. It recently confirmed that it would cut around 20 percent of its workforce by the end of this year. That follows 20,000 job cuts from June 2024 to July 2025. Earlier this year, it took on a new CEO to try to right the ship.

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