By Bolaji Ojo
Intel Corp. said its contract chip-making division will begin manufacturing chips for MediaTek. The Taiwanese fabless company joins with Intel in the face of tight manufacturing capacity at foundries globally. The companies did not say exactly when the production would start.
MediaTek’s business expands Intel Foundry Service’s (IFS) gradually growing list of customers. Up to now, Taiwan Semiconductor Manufacturing Co. (TSMC) has been MediaTek’s top foundry partner, providing all leading nodes required by the fabless IC supplier.
One of IFS’ biggest obstacles to penetrating the foundry business is its position as a captive unit of Intel, the microprocessor giant that for decades dominated the entire semiconductor industry until Samsung Electronics and TSMC began challenging its leadership. Intel has been marketing IFS to fabless chip makers in North America and Europe as an alternative supplier to TSMC. The deal with Intel also gives MediaTek a viable foundry partner for its Asian customers, according to company executives.
“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, MediaTek’s vice president of platform technology and manufacturing operations, in a statement announcing the agreement. “With its commitment to major capacity expansions, IFS provides value to MediaTek as we seek to create a more diversified supply chain.”
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The MediaTek agreement is among the largest manufacturing partnerships IFS has announced since it was re-constituted last year by CEO Patrick Gelsinger. MediaTek’s products are expected to be made by IFS on its 16nm node, according to media reports. The attraction of IFS to MediaTek includes its fab presence in both North America and in Europe, the companies said.
Intel had previously dabbled in the foundry business but with limited success, and has only recently begun a more aggressive push into the sector. To improve its chances of success, Intel announced plans in February to acquire Israeli foundry company Tower Semiconductor for $5.4 billion. Intel said it expects the Tower deal to close in the first quarter of 2023.
MediaTek is one of the world’s largest fabless semiconductor companies serving the smartphone, display, connectivity and Internet of Things markets. In 2021, MediaTek reported sales of TWD493.4 billion, ($16.5 billion) up 53 percent, from TWD322.2 billion, in 2020. It ranks as the world’s fourth largest fabless chip maker by revenue. Analysts expect the company to report sales of TW$590.5 billion in 2022, up 20 percent from 2021.
Bolaji Ojo is publisher and managing editor at the Ojo-Yoshida Report. He can be reached at b.ojo@ojoyoshidareport.com.
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