Intel Turns "Scrap" Chips into New Revenue Source

Intel has found an unusual way to boost its revenue amid the surge in demand for artificial intelligence (AI). The US-based chip company is now reselling chips that were previously considered “scrap” or unfit for use, transforming them into a new source of profit. This information was revealed by analyst Ben Bajarin from the market research firm Creative Strategies. Through his personal X account (formerly Twitter), he stated that he received this explanation from Intel’s investor relations division. According to Ben, the “scrap” chips in question are Intel dies that were previously regarded as production defects and not used as finished products for consumers. Generally, chips located in the centre of the wafer have the best quality and are used for main products. Meanwhile, chips on the edges of the wafer are more prone to minor defects due to the manufacturing process. As a result, edge chips are usually considered unfit for premium products. In some cases, these chips have their specifications downgraded for lower-end products or are not used at all. The situation has changed with the increasing demand for processors (CPUs) due to the AI trend. The skyrocketing computing needs mean that almost all chips, including those previously unused, now have value. Intel has then “turned its mind” and begun repackaging these previously worthless chips through a quality-based sorting process known as chip binning. Through this process, lower-quality chips can still be designed as finished products, albeit with downgraded specifications. These chips are then sold to meet AI computing needs. This demonstrates that the current CPU supply is quite tight, as customers are willing to use lower-quality chips to fulfil their AI computing requirements. This condition also becomes an additional source of revenue for Intel. As a CPU manufacturer, particularly in the server line like Intel Xeon, Intel’s products are widely used in data centres and global AI companies, and Intel appears to have profited significantly from this business. The repackaged “scrap” chips now seem to provide additional margins and a new profit field, which was previously not included in the company’s revenue potential.