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 aim is to help MediaTek build a "more balanced, resilient supply chain," with added capacity in the US and Europe. 

MediaTek is a fabless chipmaker that supplies processors for smartphones made by OnePlus, Samsung and others, with most of its capacity currently handled by fab giant TSMC. However, it looks like Intel will build chips for less glamorous devices used for industrial computing, medical devices, internet-of-things applications and more. Intel currently manufactures chips for MediaTek used in its 5G data card business.

Still, the partnership meets Intel CEO Pat Gelsinger's pledge to seek customers for its foundry business. Intel launched IFS in 2021 to take advantage of surging demand for semiconductor manufacturing by offering "leading-edge process and packaging technology," along with committed capacity in the US and Europe. As one of the leading fabless chip makers, MediaTek would be a key client. 

Last year, Intel announced that it would build chips for Qualcomm as part of its foundry launch. It also detailed its "IDM 2.0" strategy to catch rivals TSMC and Samsung by 2025, kicking it off with a $20 billion investment in two Arizona fabrication plants. Later in 2021, the Biden administration spurned plans by Intel to manufacture silicon wafers in China as a way to relieve global chip shortage issues, citing security concerns. 

The US Senate is set to vote on the CHIPS Act designed to bolster domestic semiconductor manufacturing with tax credits and up to $52 billion in subsidies. However, some industry players are concerned that it could unduly favor Intel, to the detriment of smaller manufacturers like AMD, Qualcomm and NVIDIA. Those companies design their own chips but don't manufacture them, so would see no direct benefit from subsidies.