One of the biggest chip design companies in the world, MediaTek Inc. from Taiwan, will use chips made by Intel Corp. the company announced on Monday. One of the biggest agreements Intel has announced since starting its so-called foundry division early last year is the manufacturing agreement.
“That’s a pretty big deal for us to engage a customer from Taiwan and them betting on us to grow and try this. And so this is a major anchor customer win,” Randhir Thakur, president of Intel Foundry Services, told Reuters.
The dominant participant in that market is TSMC. The majority of chips produced by Intel were self-designed
Chip economist Dan Hutcheson of TechInsights stated that although there were concerns within the industry about Intel’s ability to succeed in the foundry business, the agreement with MediaTek proves that the company is on the right track and that its investments, including in hiring the best executives, are paying off.
“When you go into a foundry, you’re putting at risk about two years of work,” said Hutcheson about the risk for chip design firms like MediaTek. “If something happens and the foundry can’t pull it off, you’ve lost that design window in that market window.”
While Intel declined to disclose the deal’s financial terms or the number of chips it would be manufacturing for MediaTek, it did state that the first products would be produced over the course of the following 18 to 24 months using a more advanced manufacturing process known as Intel 16. These chips will be used in smart devices.
“MediaTek has always adopted a multi-sourcing strategy,” MediaTek said in a statement. “In addition to maintaining close partnership with TSMC in advanced process nodes, this collaboration will enhance MediaTek’s supply for mature process nodes.”
Prior to this, Intel had already disclosed that Qualcomm Inc. and Amazon.com had signed agreements with its foundry division.
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