If Intel decides to expand its outsourcing to TSMC, it may impact its production and R&D base in Oregon, USA

Foundry leader TSMC is preparing to receive outsourcing orders from processor leader Intel. Intel also said that it will announce whether to expand the outsourcing mechanism as soon as the end of 2020. At the moment, there is actually a group of people who are worried, that is, Intel’s 21,000 employees in Oregon, USA And local related companies. Intel is currently the largest investment company in Oregon. Once it expands chip outsourcing production, it will inevitably impact local vacancies and affect local economic development.

According to a local Oregon media "The Oregonian" report, in addition to laboratories and advanced wafer fabs, Intel also has offices in Oregon, employing thousands of administrative and marketing personnel. If you add the suppliers, contractors and construction workers who build and maintain the operation of the fab, Intel's local investment has become a complete ecosystem. Once the investment structure changes, the impact level will impact the local economic development.

The report quoted an analyst from VLSI Research, a semiconductor research unit, saying that if Intel expands outsourcing production and gradually fades out of integrated design and manufacturing, it may gradually make the Intel base in Oregon become irrelevant. Even if the previous Intel CEO Bob Swan said that even if the chip is outsourced, you can choose to move it back at some time in the future. According to the experience of other manufacturers, although companies say this is a transitional strategy, it is usually very difficult to implement the plan. It's hard to look back. Even for a company as large as Intel, it is difficult to maintain two ecosystems. On the one hand, it outsources work and on the other it maintains in-house manufacturing. The cost of doing so is too high.

The report said that Intel’s production base in Hillsboro, Oregon, used to provide Intel housing and land tax concessions in exchange for Intel’s local investment. It is estimated that over the past 10 years, tax relief has saved Intel more than US$1.1 billion. Tax incentives depend on Intel’s capital expenditures in Oregon. Representatives must continue to invest in order to continue to enjoy tax incentives.

Bob Swan continued to emphasize that expanding outsourcing will not affect Intel’s fab production in Oregon, nor will it close local research laboratories. At present, Intel has outsourced as much as one-fifth of its products, but the technology and development of its Oregon base has maintained its leading position. Regardless of whether it expands outsourcing, Intel will continue its research and development work in Oregon. In order to maintain advanced production, Intel will also invest funds to continue to expand the scale and production capacity of local fabs.

Wall Street market analysts believe that the timing is good, and the semiconductor market is in a steady state of expansion. Once Intel chooses the segmented cutting manufacturing business, it is expected to create many opportunities. For example, when Intel outsources advanced process products to TSMC, the existing factories can manufacture other products with potential for development. For Intel, which is behind other competitors in advanced processes, it may be better for Intel to integrate other resources to maximize its effectiveness. Direction of development.