Intel enters new phase in its history with landmark MediaTek deal

Intel’s new third-party chip manufacturing division has signed its first marquee customer: MediaTek.

The deal will see Intel Foundry Services (IFS) manufacture a number of MediaTek chips for use inside smart edge devices, while pure-play foundry TSMC will continue to produce the company’s smartphone processors, for which it is best known.

The arrangement with Intel is designed to allow the Taiwanese firm to “build a more balanced, resilient supply chain”, it was said, as well as giving the company the option to ramp up production volumes if necessary.

Lift-off for Intel Foundry Services

Intel announced the launch of IFS early last year, signalling the start of a new era for the company, which has historically manufactured only its own chips.

The broad objective behind the new strategy is to ramp up manufacturing capacity and diversify revenue streams amid a period of record-high demand for semiconductor products, while also minimizing the reliance on Asian foundries for the manufacturing of the world’s most advanced semiconductors.

Since the initial announcement, Intel has announced a series of multi-billion-dollar investments in new manufacturing facilities across the western world, including major campuses in Germany and Ohio, USA. These new facilities will be used to manufacture Intel’s own bleeding-edge processors, as well as those of IFS customers. 

The partnership with MediaTek, one of the largest fabless semiconductor firms in the world, represents an important milestone for IFS, which until now has worked only with small customers. Currently, IFS is bringing in a minuscule portion of Intel’s overall revenue, but the Meditek deal is expected to result in a significant rise in wafer volume for the division.

“As one of the world’s leading fabless chip designers powering more than 2 billion devices a year, 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.”

MediaTek, for its part, emphasized the benefits of the partnership from a growth, development and strategy perspective.

“MediaTek has long adopted a multi-sourcing strategy. 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, CVP of Platform Technology and Manufacturing Operations.

“With its commitment to major capacity expansions, IFS provides value to MediaTek as we seek to create a more diversified supply chain. We look forward to building a long-term partnership to serve the fast-growing demand for our products from customers across the globe.”