Published: July 27, 2022
Intel will be producing semiconductors for MediaTek, a significant supplier of smartphone processors and a competitor of Qualcomm.
The two companies announced early this week that Intel Foundry Services would manufacture multiple chips for MediaTek for various smart edge devices.
Pat Gelsinger, who took over as CEO of Intel in 2021, made renewing the foundry business a top priority since he wants to catch up with and eventually dethrone his Asian rivals, Samsung and TSMC.
The company is said to allocate over $40 billion to build fabrication plants around the globe.
Furthermore, the said agreement is expected to significantly boost the U.S. company’s contract chips-making business. It will also help the Taiwanese company have a more steady supply of chips, reaching as far as the U.S. and Europe.
Since the chip shortage started in early 2021, global chip companies have focused on strengthening their supply chains and bringing variety to production.
As chip demand rises, Intel and its Asian rivals intend to increase spending on foundries. TSMC and Samsung dominate chip mass production worldwide, accounting for over 70% of the foundry revenue.
However, Intel has been left behind in this segment and hopes that getting MediaTek as a customer will help it. Admittedly, not many companies can manufacture such advanced types of chips.
And to be able to catch up, Intel plans to produce chips designed by other companies through its foundry business, and MediaTek is one of its early beneficiaries of this project.
Although it’s worth mentioning that according to Counterpoint Research, MediaTek had 38% of the smartphone application processor market in Q1 2022, making it the largest company in the segment.