(Reuters) – Intel Corp. plans to tap Taiwan Semiconductor Manufacturing Co to create a second-generation discrete graphics chip for personal computers that it hopes will help combat the rise of Nvidia Corp, two sources said be familiar with the matter.
The chip, known as “DG2,” will be made on a new chip manufacturing process at TSMC that has not yet been formally named, but is an improved version of the 7-nanometer process, the two trusted folks said.
Long-time the world leader in chip technology, Intel has lost its manufacturing lead in recent years and is now debating outsourcing some of its flagship chips for central processor units, or CPUs, which will be released in 2023.
Activist investor Third Point LLC sent a letter to Intel’s board last month asking it to consider whether it would keep its chip design and manufacturing operations under one roof.
Intel has long outsourced chips to its flagship CPUs and is a major customer of TSMC, the world’s largest contract chip manufacturer. The head of Intel’s self-driving subsidiary Mobileye told Reuters last month that the next autonomous vehicle processor will still be manufactured by TSMC based on its 7-nanometer process.
With its graphics chips, Intel wants to tap into the booming PC gaming market. The DG2 chip is expected to be released in late this year or early 2022 and will compete with Nvidia and AMD gaming chips that cost between $ 400 and $ 600, the sources said.
Chip manufacturing technology for the DG2 is expected to be more advanced than Samsung Electronics Co Ltd’s 8-nanometer process used in Nvidia’s most recent circular graphics chips released in the fall, people said. They added that it would also be ahead of Advanced Micro Devices graphics chips made with TSMC’s 7-nanometer process.
Intel declined to comment, and TSMC did not immediately respond to a request for comment.
Intel officials said last year it would outsource the DG2 chip, but they did not say which chip maker won the company or what chip manufacturing process it would use.
Reporting by Stephen Nellis in San Francisco; Editing by Jonathan Weber and Jane Wardell