Intel’s new foundry division has secured a notable client in the form of MediaTek, one of the world’s leading smartphone processor makers. MediaTek, which previously used TSMC to manufacture all its semiconductors, is the latest high-profile company to announce it is working with Intel Foundry Services (IFS), a newly launched division that the American chipmaker hopes will help lift its flagging fortunes.
MediaTek will employ IFS “to manufacture multiple chips for a range of smart edge devices”, the companies said in a joint statement released today.
“MediaTek is a terrific partner for IFS as we enter our next phase of growth,” said IFS president Randhir Thakur. “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.”
What sort of chips will Intel make for MediaTek?
Based in Taiwan, MediaTek was the fourth-largest fabless chip designer – meaning it designs but does not manufacture processors – in the world last year, producing two billion devices. It leads the way in smartphone chipsets with a 38% share of the market, according to Counterpoint Research.
It has previously relied on TSMC, the market leader in chip manufacturing, to manufacture its products, but some of these will now be produced by Intel. MediaTek will use a process known as "Intel 16", designed for low-power devices such as smartphone chips. The size and value of the contract have not been disclosed.
There is no suggestion MediaTek is abandoning TSMC completely, but the company says it wants to diversify its supply chains. The reliance of chip companies on production facilities based in two South East Asian countries - Taiwan and South Korea - was brought into focus during the global chip shortage, and has led to companies including Intel and TSMC building new fabs in the US and Europe.
The plans have been encouraged by hefty subsidies expected from the US government and the EU. Though some of these plans could stall as the chip shortage eases and economic conditions become more difficult, many building programmes are already underway.
"With its commitment to major capacity expansions, IFS provides value to MediaTek as we seek to create a more diversified supply chain," said NS Tsai, corporate senior vice president of platform technology and manufacturing operations at MediaTek. "We look forward to building a long-term partnership to serve the fast-growing demand for our products from customers across the globe."
Intel Foundry Services: MediaTek deal reflects growing momentum
Having previously focused on producing chips for its own use, Intel announced last year that it was going into the foundry business as part of a new strategy spearheaded by CEO Pat Gelsinger, who rejoined the company in February 2021.
In recent years it has struggled to keep up with the technological advances of TSMC and Samsung, but is investing heavily in leading-edge chip production in a bid to narrow the gap.
So far some of tech's biggest names have shown an interest in using IFS, and the company has already secured deals which will see it make chips for Amazon's cloud division, AWS, and smartphone chip producer Qualcomm. It has also benefited from the support of the US government, securing a contract with the US Department of Defense last year to provide it with foundry services.
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