Intel and MediaTek Create a Foundry Partnership

Intel and MediaTek have formed a major partnership to design chips for "a variety of smart edge products" using Intel Foundry Services (IFS), according to the company. With extra capacity in the US and Europe, the goal is to assist MediaTek develop a "more balanced, resilient supply chain."

What we know

MediaTek is a fabless chip company that creates processors for smartphones produced by OnePlus, Samsung, and others, with the bulk of its manufacturing now handled by TSMC. However, according to reports, Intel will create chips for less glamorous applications such as factory computing, medical equipment, internet-of-things apps, and more. Intel currently produces chips for MediaTek's 5G data card business.

However, Intel's cooperation with MediaTek does fulfill its CEO Pat Gelsinger's promise to seek clients for its foundry business. Intel established IFS in 2021 to capitalize on increasing demand for semiconductor manufacturing by providing "leading-edge process and packaging technology," as well as committed capacity in the US and Europe. MediaTek would be a valuable customer because of its position as one of the world's major fabless chip makers.

Intel announced last year that it would begin producing Qualcomm chips as part of its foundry launch. It also laid out its "IDM 2.0" plan to catch competitors TSMC and Samsung by 2025, beginning with a $20 billion investment in two Arizona fabrication plants. Later in 2021, the Biden administration rejected Intel's proposal to build silicon wafers in China as a method to alleviate global chip scarcity concerns, citing national security risks.

The US Senate is preparing to vote on the CHIPS Act, which would provide tax credits and up to $52 billion in subsidies for domestic semiconductor manufacturing. Some industry participants are concerned that it may unfairly favor Intel at the expense of smaller producers like AMD, Qualcomm, and NVIDIA. Because they design their own chips but don't manufacture them, these businesses would not benefit from subsidies directly.