Advanced Process Race: Intel May Lag Behind TSMC

Intel plans to reduce capital expenditures for two consecutive years, while TSMC, the leader in foundry services, announced at its recent earnings conference that it will raise the lower limit of its capital expenditures, primarily to expand advanced manufacturing processes. The foundry business is a highly capital and knowledge-intensive industry, and Intel’s decision to cut capital expenditures is closely watched to see if it will affect its competition with TSMC, including potentially falling behind in advanced process technology development and ambitions to expand foundry services.

In the global semiconductor manufacturing market, TSMC dominates with a high market share, leaving competitors like Intel and Samsung striving to keep pace. TSMC maintains a strong performance in advanced process technology and customer base. At the July earnings conference, TSMC revised its estimated capital expenditures from $28 billion to $32 billion to a new range of $30 billion to $32 billion, increasing the lower limit of its capital expenditure forecast for the year.

TSMC announced that its 2nm process will go into mass production next year, with the number of wafers processed in the first two years expected to exceed that of the 3nm and 5nm processes during the same period. The most advanced A16 process is scheduled for mass production in the second half of 2026 and will initially be produced in Taiwan, China.

Samsung has frequently publicized its progress and orders for advanced processes, recently announcing that its second-generation 3nm GAA (Gate-All-Around) technology is in full mass production for technologies below 5nm, with process technology in the U.S. closely following TSMC.

Market analysts note that laying out advanced process technology is crucial for winning battles and is also a cash-intensive business. If the performance and yield of advanced process technology are not up to par, pushing related foundry services or competing with rival chip products will be particularly challenging.

Intel’s announcement to cut capital expenditures, even with some foundry support from TSMC, puts it in a tough spot in fighting on two fronts in the chip product and foundry markets against strong competitors. The market is now more focused on how these spending cuts will affect long-term strategic planning.