Intel has had over two decade’s worth of a lead over their competitors when moving to a new production process. In the spirit of chasing Moore’s law, the company ran down every avenue possible to meet their margins and beat the competition, but they ran into issues as the numbers kept getting smaller. First there was a delay in shifting to the 14nm FinFet process, which stacks transistors differently to gain density. More recently there have been multi-year delays in the 10nm process which Intel ex-CEO Brian Krzanich discussed recently, saying that the delays were real, but that the company knew where the problems were and how to fix them. According to reporting from SemiAccurate, however, the 10nm delay affects more than just Intel’s ability to deliver new products, but will soon also result in one of their customers losing their ability to compete in the chip industry.
According to several sources close to SemiAccurate, the company impacted by Intel’s delays in the 10nm production process is currently worth about $20 billion according to international stock exchange valuations, and has been around for at least two decades, if not more. They are a silent customer at Intel’s foundries, and Intel’s performance on their process is what the company depended on for their own product set to roll out in 2018. SemiAccurate editor Charlie Demerjian says that Intel’s failure to get the process working is only a part of the main issue, and says that it is “pure business, bad management decisions, and some scary potential fallout” that contributed to the failure.
The interesting part of the story is that the company, which has not been named yet, is said to have banked on their chips being produced on the process – they don’t have the capacity to produce these chips themselves. Intel’s process was supposed to have been ready for production in 2016, and the delays have been publicly noted several times. The company is supposedly also a “foundational technology giant”, with much of the industry they operate in dependent on them to function. While a lot of people are guessing which company this might be, I think it would be more interesting to find out which sector the company operates in. Intel makes chips for companies in sectors like mobile communications, healthcare, and finance, but they don’t have the same kind of reach as TSMC and Global Foundries, so their partnerships tend to be very specialised. If a major player in that industry has to suddenly consider selling itself off to another company to stay afloat, or start filing for bankruptcy as SemiAccurate suggests, the fallout will have a net negative effect on anything else that Intel currently does.