Intel strikes a deal to manufacture MediaTek’s chips

Intel and MediaTek have formed a strategic partnership to build chips for “a range of smart edge devices” using Intel Foundry Services (IFS), Intel announced. The goal is to help MediaTek build a “more balanced, resilient supply chain” with additional capabilities in the US and Europe.

MediaTek is a fabless chipmaker that supplies processors for smartphones from OnePlus, Samsung and others, with most of its capacity currently managed by fab giant TSMC. However, it looks like Intel is building chips for less glamorous devices used for industrial computing, medical devices, Internet of Things applications, and more. Intel currently makes chips for MediaTek to use in its 5G data card business.

Still, the partnership is in line with Intel CEO Pat Gelsinger’s promise to seek customers for his foundry business. Intel launched IFS in 2021 to capitalize on increasing demand for semiconductor manufacturing by offering “leading process and packaging technology” along with committed capacity in the US and Europe. As one of the leading fabless chip manufacturers, MediaTek would be an important customer.

Last year, Intel announced it would build chips for Qualcomm as part of its Foundry launch. It also detailed its “IDM 2.0” strategy to trap rivals TSMC and Samsung by 2025, starting with a $20 billion investment in two Arizona factories. Later in 2021, the Biden administration snubbed Intel’s plans to manufacture silicon wafers in China to solve problems of the world’s chip shortage, citing security concerns.

The US Senate will vote on the CHIPS bill, which aims to boost domestic semiconductor manufacturing with up to $52 billion in tax credits and subsidies. But some industry players worry it could unduly favor Intel, to the detriment of smaller manufacturers like AMD, Qualcomm, and NVIDIA. These companies design their own chips but do not manufacture them and therefore would not benefit directly from subsidies.

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