Intel reallocates resources: Focus on 18A node instead of 20A

Intel has announced that it is ceasing the development of the 20A node in favor of the smaller 18A node. Originally, the 20A node was intended to form the basis of the upcoming Arrow Lake CPUs. This responsibility is now expected to be undertaken by external partners, such as the renowned chip manufacturer TSMC. The 20A node was first introduced in 2021 under the then-new CEO Pat Gelsinger. This step was part of a roadmap describing the transition from the proven 14nm node to smaller manufacturing processes. Although the focus on the 18A node can be seen as a technical advancement, it also raises questions regarding Intel's long-term plans. The 20A node was originally supposed to mark the beginning of the so-called 'Angstrom Era,' where transistor sizes surpass nanometer measurements. Intel has faced several issues in recent months. A month ago, the company announced a 15% workforce reduction, which manifested in historic revenue declines and a resulting lawsuit from investors. Additionally, wafers produced by Intel failed tests from Broadcom, highlighting further challenges in the manufacturing process. Despite these adversities, Intel remains focused on the foundry business. The company was a pivotal driver behind the Chips and Science Act of 2022, which allocates up to $20 billion in grants for the establishment of domestic chip manufacturing. However, Intel has yet to receive funds from this program and is internally frustrated with the government's delays. Despite the challenges, Intel has secured some significant customers. Microsoft and the U.S. Department of Defense have both signed contracts to produce their own chips on Intel's 18A node. These large contracts could be the reason Intel is reallocating resources in favor of the 18A node, particularly as the company needs to stabilize its finances. Intel's Vice President for Technology Development, Ben Sell, emphasized the importance of the prior work on the 20A node for future development and the optimization of engineering investments. Interestingly, Intel recently announced the cancellation of its Innovation Event in September, where details about Arrow Lake were to be disclosed. Despite the issues with the 20A node, Intel recently introduced its Lunar Lake CPUs, which will be available in laptops later this month.