SAN RAMON (AP) – Intel is falling further behind in the race to build faster and more powerful computer chips, a nagging problem that may force the Silicon Valley pioneer to seek help from other manufacturers as it scrambles to catch up in the technological arms race.
The sobering news emerged late on Thursday when Intel disclosed that there will be a six-month to one-year delay on its development of a next-generation chip-making process already in use by a major Taiwan supplier, TSMC.
The unexpected snag means Intel’s 7 nanometre processing technology won’t be ready until the end of 2022 or early 2023, raising the possibility that other chip makers will already have taken another leap ahead.
Intel’s stock plunged 16 per cent in Friday’s afternoon trading as investors adjusted to the tectonic shifts that have transformed Intel from a trailblazer to a laggard in an area of technology that it dominated for decades. The steep drop wiped out USD41 billion in shareholder wealth and dragged down the Dow Jones industrial average.
Not long ago, the Santa Clara company was so far ahead of the pack that it was inconceivable that it might ever farm out some of its manufacturing to other companies. That’s no longer the case.
“The unthinkable may not be that far away when Intel is forced to acknowledge that the growing gap between it and the TSMC camp is an insurmountable chasm,” BMO Capital Markets analyst Ambrish Srivastava wrote in a research note.