Intel Turns Scrap Dies Into Usable CPUs as Demand Keeps Rising

We have been reporting on the intense demand in the CPU sector currently sweeping the industry. AMD and Intel have sold out their inventories, and lead times are now weeks long. However, Intel, which manufactures a large part of its CPU portfolio, has been handling the situation differently. According to Intel and confirmed by industry analyst Ben Bajarin, the company is repurposing some of the dies found on the very edge of the silicon wafer, which would have otherwise become silicon scrap, into products that customers are eager to buy. This approach allows even some SKUs, which may have been flawed due to various effects like silicon node yield, to find new life through repurposing. Intel’s customers are so eager for CPUs that higher-end parts, which would typically be discarded, are now being sold as independent SKUs. No silicon is left behind.

For example, when Intel produces a Xeon 6 “Granite Rapids” CPU on the Intel 3 node, the CPU compute die can accommodate up to 44 cores per die, but some are disabled for yield and power reasons. When the yield fails, these compute dies are repurposed into SKUs with lower core counts, as it costs Intel money to manufacture the die, and wasting it would be a significant loss of resources. However, when the die doesn’t achieve satisfactory yield on the Intel 3 production line, the company would usually discard it if it can’t extract a reasonable number of working cores. Amidst one of the highest-ever recorded CPU shortages, Intel is doing the opposite. The company is using these defective or scrap dies and packaging them into lower-class SKUs to sell to its customers, as any CPU availability is crucial, and customers are eagerly purchasing them. Imagine a wafer edge, which is round, having only a few working P-Cores, and that being packaged into a CPU that a hyperscaler would integrate into their offering.

We have already reported on Intel Foundry achieving better yields across Intel 4, Intel 3, and 18A nodes, which power the majority of Intel’s product portfolio. This improvement has significantly boosted Intel’s operations, with Intel Foundry seeing an increase of $72 million quarter-over-quarter as better yields across these nodes drove higher gross margins.