Intel to fabricate chips for MediaTek in bid to revive foundry unit

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Intel Foundry Companies will manufacture a number of chips for MediaTek for a variety of sensible edge gadgets, the 2 corporations mentioned on Monday.

Fabian Bimmer | Reuters

Intel will manufacture semiconductors for Taiwan’s MediaTek, giving the U.S. firm a giant enhance for its contract chipmaking enterprise.

MediaTek is without doubt one of the greatest suppliers of smartphone processers and a rival to Qualcomm. Intel Foundry Companies will manufacture a number of chips for MediaTek for a variety of sensible edge gadgets, the 2 corporations mentioned on Monday.

After taking on as CEO of Intel final 12 months, Pat Gelsinger made revitalizing the foundry business a key precedence as a way to catch up with and break the dominance of its Asian rivals TSMC and Samsung. By way of its foundry enterprise, Intel will manufacture chips that different corporations design. The U.S. large plans to spend greater than $40 billion constructing fabrication vegetation around the globe.

“The settlement is designed to assist MediaTek construct a extra balanced, resilient provide chain by means of the addition of a brand new foundry associate with vital capability in the USA and Europe,” Intel mentioned in a press launch.

NS Tsai, a company senior vp at MediaTek, mentioned the partnership with Intel “gives worth” to the corporate because it seeks “to create a extra diversified provide chain.”

TSMC is MediaTek’s important manufacturing associate for chips. It is unclear what MediaTek semiconductors Intel shall be accountable for making.

MediaTek was not instantly out there for remark when contacted by CNBC.

Chip corporations around the globe have been specializing in strengthening their provide chains and diversifying manufacturing amid a global chip shortage that has persevered since early 2021.

However the manufacturing of probably the most superior chips will not be one thing many corporations can do and is in truth is dominated by TSMC and Samsung. These two corporations account for greater than 70% of world foundry income, in response to TrendForce.

As demand continues to rise for chips, Intel and its Asian rivals plan to ramp up spending on foundries.

However Intel lags far behind, although gaining MediaTek as a buyer will give the corporate a lift. MediaTek had 38% of the smartphone software processor market within the first quarter, making it the most important firm within the section, in response to Counterpoint Analysis.

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