Intel's upcoming "Nova Lake-S" generation of processors is on the horizon, and the company is already making preliminary manufacturing decisions before entering high-volume production. According to a research note from investment bank KeyBanc Capital Markets, Intel initially planned to outsource the main compute tile production for "Nova Lake" to TSMC, utilizing its 2 nm N2 node. The majority of the production, about 60-70%, was to be handled by TSMC, with the remainder produced in-house by Intel Foundry on the 18A node. This meant Intel would dual-source production for its next-generation chip. However, the latest supply chain information suggests that the company now intends to bring the majority of "Nova Lake" compute tile production in-house, with about 80-90% of the tiles being manufactured by Intel Foundry.

This shift comes as Intel's 18A node yields have improved to levels that are finally reliable enough to avoid any product delays, while the company remains fully satisfied with the yield rate and the number of dies that go to waste. Intel has reportedly resolved all yield issues it experienced with its 18A node over the past few months. Our earlier report indicated that the company has addressed these yield issues, making high-volume production of its latest node sustainable from both a manufacturing yield and economic standpoint. For a mature node like 18A, defect rates are now low, around D0=0.1 or D0=0.2, and it is likely that Intel has achieved the lower end of that spectrum due to node advancements and months of high-volume production with "Panther Lake."