"Samsung, We're the First to Mass Produce at 2nm" Intel's Surprise Announcement... The Key Issue Is 'Real Yield' [Chip Talk]

Announces 2nm Mass Production Ahead of TSMC and Samsung Electronics
Applies New Technologies Including GAA and Backside Power Delivery
Semiconductor Supremacy Race Enters Full Swing
Intel Attracts Investment, 18A Process Becomes Turning Poi

Intel, the American semiconductor company that has been struggling with management difficulties, has ignited the race for semiconductor supremacy by making a surprise announcement about the world's first mass production using the 2nm (1nm = one billionth of a meter) process. There are forecasts that this could pose another threat to Samsung Electronics, which needs to catch up with Taiwan's TSMC in the foundry (semiconductor contract manufacturing) market.

Intel Surpasses Even Samsung to Achieve World's First 2nm Mass Production

A 12-inch semiconductor wafer exposed to lithography in Intel's 18A process. Intel

On October 9 (local time), Intel announced that it had begun mass production of its next-generation laptop processor, "Panther Lake," using the 18A process. The company stated that it has fully activated this process at its Ocotillo Fab 52 facility in Arizona, USA, and that the core of the processor, the central processing unit (CPU), was manufactured using 18A technology. The 18A process refers to manufacturing semiconductor circuit widths at 1.8nm, which is classified as 2nm-class technology.

Intel is the first semiconductor company in the world to officially announce mass production using the 2nm process. Until now, only TSMC and Samsung Electronics had been able to mass-produce foundry chips using leading-edge processes below 5nm. This is why Intel's move is being seen as a signal of its comeback. The 2nm process is more advanced than the current leading-edge 3nm process, and both companies are also aiming for mass production within this year. TSMC has significantly improved its yield, but has yet to announce mass production.

Intel has incorporated a range of advanced technologies into its 18A process. For the first time, it independently applied gate-all-around (GAA) technology. GAA structures the junction surface between the gate and the channel, which is a key element of transistors, into four surfaces. Previously, the FinFET structure had three junction surfaces, but GAA enhances both performance and power efficiency. Samsung Electronics was the first in the world to introduce this technology in its 3nm process in 2022, but faced challenges due to yield issues.

Additionally, Intel has applied, for the first time in the industry, backside power delivery network (BSPDN) technology. This involves placing power supply lines on the backside of the wafer where the circuits are drawn. This can also improve chip performance and power efficiency. Although it was not applied to the recently unveiled "Panther Lake," Intel plans to apply the backside power delivery network to the server processor "Xeon 6 Plus," which will be manufactured using the 18A process and released in the first half of next year.

Intel Ignites Foundry Competition, but the Key Is 'Real Yield'

The semiconductor industry has mixed views on Intel's challenge in the foundry business. According to Intel's announcement, it has surpassed TSMC and Samsung Electronics in terms of technology, but there is still skepticism about whether this can be trusted.

Until this past summer, it was known that Intel was struggling to secure yields for the 2nm process. At the time, local media reported that Intel's 2nm process yield was only 10%, a figure far from what is required for mass production. Generally, a yield of 70-80% is considered the break-even point for stable mass production.

TSMC, which has not yet begun mass production, reportedly surpassed a 60% yield in the first half of this year, while Samsung Electronics is also said to have secured a significant yield, though neither has announced mass production. As the width of semiconductor circuits narrows, performance and efficiency can be improved, but the manufacturing difficulty increases, making yield rates crucial.

Industry insiders assess that Intel will first apply the 18A process mainly to its own products, while aiming to enhance the completeness of its next-generation 14A (1.4nm) process to secure clients. For Intel's foundry challenge to be considered a true comeback, it must demonstrate solid results, including external orders.

Intel CEO Pat Gelsinger stated, "The United States has always been the home of Intel's most advanced research and development, product design, and manufacturing," adding, "We are proud to continue this legacy as we expand our domestic operations and bring new innovations to the market." Intel had previously announced that, even as it carried out a large-scale restructuring for management normalization in July, the new 18A manufacturing process was proceeding smoothly. However, the company noted that the most advanced 14A manufacturing process would be expanded based on 'confirmed customer orders.'

Semiconductor Supremacy Race Heats Up... U.S. Provides Support for Intel

Intel has faced difficulties in recent years as it failed to keep up with demand for cutting-edge chips, leading to management struggles. This announcement is noteworthy as it comes amid progress in investments aimed at restoring management stability. As the United States seeks to strengthen its advanced manufacturing capabilities, there is a growing view that the race for semiconductor supremacy has entered a full-fledged phase.

In August, the U.S. government purchased a 10% stake in Intel for $8.9 billion (about 13 trillion won) as part of efforts to bolster American manufacturing capabilities. Japan's SoftBank also signed a contract to acquire Intel shares worth $2 billion (about 3 trillion won). In addition, earlier last month, Nvidia invested $5 billion (about 7 trillion won) in Intel to jointly develop chips for data centers. Products manufactured using the 18A process are seen as the watershed for Intel's business recovery.

Samsung Electronics is also raising expectations in the 2nm market by preparing for mass production of its next-generation mobile chipset, the "Exynos 2600." Industry insiders expect that the announcement of Exynos 2600 mass production will come as early as the end of this month or, at the latest, next month. The Exynos is designed by Samsung Electronics' System LSI division and produced by its Foundry division. The 2nm process will be applied, with the goal of equipping the Galaxy S26 series to be released early next year.

Although the foundry market continues to grow, Intel's entry is a cause for concern from the perspective of Samsung Electronics, which needs to catch up with TSMC. According to market research firm Counterpoint Research on October 10, TSMC held a 71% share of the pure foundry market in the second quarter of this year, followed by Samsung Electronics with 8% and China's SMIC with 5%. TSMC's share increased by 6 percentage points compared to the same period last year (65%), while Samsung Electronics' share decreased by 2 percentage points over the same period.