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

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Intel Foundry Services will manufacture multiple chips for MediaTek for a spread of smart edge devices, the 2 corporations said on Monday.

Fabian Bimmer | Reuters

Intel will manufacture semiconductors for Taiwan’s MediaTek, giving the U.S. company a giant boost for its contract chipmaking business.

MediaTek is one among the most important suppliers of smartphone processers and a rival to Qualcomm. Intel Foundry Services will manufacture multiple chips for MediaTek for a spread of smart edge devices, the 2 corporations said on Monday.

After taking on as CEO of Intel last 12 months, Pat Gelsinger made revitalizing the foundry business a key priority with a purpose to meet up with and break the dominance of its Asian rivals TSMC and Samsung. Via its foundry business, Intel will manufacture chips that other corporations design. The U.S. giant plans to spend greater than $40 billion constructing fabrication plants world wide.

“The agreement is designed to assist MediaTek construct a more balanced, resilient supply chain through the addition of a latest foundry partner with significant capability in america and Europe,” Intel said in a press release.

NS Tsai, a company senior vp at MediaTek, said the partnership with Intel “provides value” to the corporate because it seeks “to create a more diversified supply chain.”

TSMC is MediaTek’s principal manufacturing partner for chips. It’s unclear what MediaTek semiconductors Intel will likely be chargeable for making.

MediaTek was not immediately available for comment when contacted by CNBC.

Chip corporations world wide have been specializing in strengthening their supply chains and diversifying production amid a world chip shortage that has persevered since early 2021.

However the manufacturing of essentially the most advanced chips is just not something many corporations can do and is actually is dominated by TSMC and Samsung. These two corporations account for greater than 70% of worldwide foundry revenue, based on TrendForce.

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

But Intel lags far behind, though gaining MediaTek as a customer will give the corporate a lift. MediaTek had 38% of the smartphone application processor market in the primary quarter, making it the most important company within the segment, based on Counterpoint Research.

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