Intel growing foundry business has received a big boost thanks to a blockbuster deal with Taiwanese chip designer MediaTek.
Under the new pact, MediaTek, which has previously partnered with Taiwanese semiconductor contract manufacturer TSMC, will rely on Intel Foundry Services (IFS) to build new chips for a range of smart edge devices.
The agreement is aimed at providing MediaTek with a “more balanced, resilient supply chain” by bringing on board IFS capacity in the United States and Europe.
Terms of the deal were not disclosed.
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The agreement is one of the most significant deals Intel has captured since launching its foundry business last year.
The deal comes just three months after Intel chief executive Pat Gelsinger told Wall Street analysts that the company’s foundry services business had hit for the first time a US$1 billion run rate.
“We continue to make progress toward being the trusted provider of foundry services,” Gelsinger said in a first quarter earnings call in April.
“Our overall customer pipeline remains robust, and we now have more than 10 qualified opportunities in advanced stages of engagement across our process and package offerings that collectively represent a deal value of greater than US$5 billion,” Gelsinger continued.
This strategic partnership is more evidence that Intel’s foundry business is broadening its reach by leveraging its chip manufacturing muscle.
“As one of the world’s leading fabless chip designers powering more than two billion devices a year, MediaTek is a terrific partner for IFS as we enter our next phase of growth,” IFS president Randhir Thakur said.
“We have the right combination of advanced process technology and geographically diverse capacity to help MediaTek deliver the next billion connected devices across a range of applications,” Thakur added.
The news comes after Gelsinger warned last week that he may expand chip production in Europe instead of the US, if Congress fails to approve the CHIPS Act with US$52 billion in government funding.
“The rest of the world is moving rapidly despite the inability of Congress to get this finished,” Gelsinger told a panel at the Aspen Ideas Festival.
In response, senator Bernie Sanders blasted Gelsinger on Twitter.
“Listen to the CEO of Intel tell you all you need to know about oligarchy, corporate arrogance, and the state of American politics," Sanders said.
"It sure sounds like extortion to me,” he said.
Earlier this year, Intel announced it would acquire Israel-based Tower Semiconductor for $5.4 billion to move forward with its plans to manufacture chips for other companies.