Intel foundry service to make chips for MediaTek, after Qualcomm

After Qualcomm, now Taiwanese semiconductor company MediaTek has signed up for Intel’s new Intel Foundry Services (IFS) to manufacture chips. Intel said that this will strengthen MediaTek’s supply chain and improve capacity in the US and Europe. MediaTek’s chips are primarily manufactured by Taiwan Semiconductor manufacturing company (TSMC), which is the leading foundry service provider in the world with a market share of 53%. 

Intel further said that MediaTek is planning to manufacture multiple chips for a range of IoT devices using IFS’ advanced process technology. Randhir Thakur, president of IFS called MediaTek a “terrific partner for IFS” to start their journey as a foundry service provider. 

MediaTek is one of the world’s leading fabless chip designers powering more than 2 billion devices a year, Thakur added. 

According to a June report by Counterpoint Research, MediaTek was the second leading chip supplier for smartphone OEMs in the US in April 2022, accounting for 45% of all smartphones after Qualcomm (47%). 

“We have an existing 5G data card business partnership with Intel, and now extend our relationship to manufacturing smart edge devices through Intel Foundry Services,” said NS Tsai, corporate senior vice president of Platform Technology & Manufacturing Operations at MediaTek. 

Tsai added that IFS provides value to MediaTek as it seeks to create a more diversified supply chain.

IFS was started by Intel last year to take advantage of the growing demand for semiconductors and offer its manufacturing capabilities as a service to fabless chip companies. Before that Intel only made products for its lineups of X86 CPUs used in PCs and servers. However, the company has been seeing stiff competition in that segment from arch-rival AMD, which under CEO Lisa Su has managed to cut into their business with their new EPYC CPUs. As of Q1 2022, Intel led the X86 CPU market with a 72.3% market share at a 7% YoY decline, while AMD accounted for 27.7% market with 7% YoY growth, according to Mercury Research data. 

At the same time, the growing demand for digitisation has triggered an unprecedented demand for semiconductors. The pandemic-led disruption has also forced governments and companies to reduce dependence on any one country for all manufacturing needs and have a distributed supplier network. To take advantage of this Intel is setting up new manufacturing facilities in the US. 

In January, Intel announced that it will spend $20 billion to set up a large chip manufacturing facility with two semiconductor fabs in New Albany, Ohio, a state in the US. The facility will be spread over an area of 1,000 acres and will employ around 3,000 people when it starts operations by 2025. Intel is also building a $19 billion chip plant in Germany.