TSMC Out? Intel’s Arc Celestial GPU Rumored For In-House Manufacturing

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Despite persistent rumors that Intel’s discrete GPU ambitions are dead in the water, a new rumor suggests otherwise. According to well-known leaker Raichu, Intel’s upcoming third-generation Arc “Celestial” GPU is still in the works and may be built on Intel’s own process technology, rather than relying on TSMC. The rumor also states that Celestial will use a revision of the Xe3 architecture, dubbed “Xe3P,” rather than the standard Xe3 design expected in Intel’s upcoming “Panther Lake” mobile processors. If true, this could mark a major milestone for Intel’s long-struggling fabrication efforts.
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The implications of this rumor are significant. Intel has spent much of the last decade playing catch-up in the foundry race after once leading the industry. While Lunar Lake and Arrow Lake processors are fabricated at TSMC, the upcoming Panther Lake is confirmed to use Intel’s 18A node, which has reportedly been yielding better than expected. If Intel plans to manufacture Celestial dGPUs in-house, it could signal that 18A is competitive with TSMC’s finest offerings. However, the specific process node remains unclear—Intel could opt for the older Intel 3, which would be less competitive against products fabbed at TSMC, but also considerably more available.

The mention of “Xe3P” as the GPU architecture also raises questions. Intel’s original Xe was fragmented across multiple variants with differing capabilities, ranging from the original Xe in DG1 and Tiger Lake all the way up to the “Xe-LPG+” used in the recently-released Arrow Lake-H mobile CPUs. Intel streamlined its approach with Xe2, using the same arch for both integrated and discrete GPUs. However, a past leak hinted at multiple Xe3 derivatives, including Xe3, Xe3+, and Xe3P. Based on that nomenclature, we’re inclined to think that Xe3P is a specialized variant rather than an enhanced version of Xe3, but there’s really no way to know for sure, yet.

Enthusiasts hoping for a shake-up in the GPU market will be watching closely. Intel’s Battlemage B580, launched back in December, was a surprise hit, offering performance rivaling NVIDIA’s GeForce RTX 4060 Ti at a significantly lower price. Many have been hoping for higher-end Battlemage models, but Intel has been silent on the matter. The prospect of Celestial arriving next year—especially if built on a leading-edge Intel node—is very exciting in the current GPU market where NVIDIA is dominant and AMD seems to be stepping back, and conceding the high-end of the market.

For now, Celestial dGPUs remain unconfirmed by Intel, and details are sparse. While Panther Lake with Xe3 graphics is expected by the end of this year, Celestial dGPUs likely won’t launch until sometime in 2026. If Intel can successfully fab these GPUs on 18A with good yields, and Intel’s 18A process is as capable as expected, it would be a major comeback for American semiconductor manufacturing and a crucial step toward breaking NVIDIA’s near-monopoly. Until official word arrives, though, take this rumor with a grain of silicon.

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