The issue long term is that Lunar Lake is built on TSMC, so Intel is netting a fraction per chip of what they'd make if they made it themselves.
Intel is currently investing $7B a quarter into getting their foundries competitive again, and it's not clear yet that they'll be able to really do so at scale. And even if they do, it's not clear whether those foundries can effectively serve customers that aren't Intel.
The reason people trust TSMC to make their chips is because TSMC isn't making a competing chip. If I come to an Intel Foundry with my design and work with them to spin up some new capability to get the features to work right, there isn't much of anything that stops Intel Chips from using that new capability to compete with me in a year.
My understanding is that Intel's chips weren't great and making power efficient 5g chips is wildly difficult. Thus ends my understanding of these issues, though.
Intel is being weighed down pretty dramatically by trying to do 5 nodes in 4 years AND do it at any scale. Intel's foundry business lost 2.8B last quarter, on revenue of 4.3B. That means they spent 7.1B in THREE months.
Intel currently can't use any of its new nodes to make their leading chips (AI PC, e.g.) because those nodes aren't operating at scale. So they're paying TSMC to make the chips. Which means that Intel isn't sending work to its own fabs to offset the costs of advancing nodes.
Plus, the foundry business hasn't managed to announce any flagship deals with outside parties.
By making it a sub at least they can raise funds to burn someone else's money while they try to spin things up.
The bigger headwind they face is that if Intel is tightly tied to the fabs, those fabs are going to be focused on serving intel, and not on serving the other customers it needs to service to have a leading node fab be remotely sustainable.
> Intel currently can't use any of its new nodes to make their leading chips
Xeon 6E was released on Intel 3 in June and Xeon 6P is launching next month. Data Center is currently a smaller market than client CPUs for Intel, but its still a $10B+ market segment for them.
