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Intel and MediaTek establish foundry cooperation to help promote U.S. chip manufacturing autonomy

Intel has signed up with Taiwan-based smartphone chip designer MediaTek as a key ally in its efforts to reclaim its chip manufacturing leadership and eventually restore its U.S. processor manufacturing prowess. The partnership, revealed Monday, is important in establishing Intel’s foundry service, which aims to significantly expand and transform Intel’s chip manufacturing business by making chips for other companies. Intel had lost its leadership position due to years of manufacturing problems during the rise of TSMC (TSMC) and Samsung, two Asian foundries.

Pictured is Intel Fab 42 in Arizona

Kevin Krewell, an analyst at Tirias Research, said of Intel’s partnership with MediaTek, “MediaTek has been a close partner of TSMC, so this is a pretty big deal.”

The deal comes at a good time for Intel. It could help draw attention to the importance of U.S. semiconductor manufacturing, an issue at the heart of the $52 billion in CHIPS Act spending Intel is trying to convince Congress to pass. Intel has been lobbying for the subsidies, postponing the groundbreaking ceremony for a new manufacturing site in Ohio, where Intel will invest at least $20 billion. The new customer would significantly expand Intel’s manufacturing volume, helping it catch up with TSMC’s massive scale and justifying the ultra-high price tag of the new chipmaking facility, called a fab.

Randhir Thakur, division president, said, “Scale is important in our business. We have other products coming into our facility, and a key benefit is that it gives us scale.”

The geopolitical calculus of chip manufacturing is also changing. TSMC is in Taiwan and Samsung is in South Korea, two regions that have traditionally had good trade relations with U.S. companies.

Industry observer Dylan Patel concluded from TechInsights’ analysis, “China’s SMIC is using foundry processes to deliver commercially available chips in the open market, which is more advanced than any U.S. or European company.”

President Joe Biden is a strong supporter of the CHIPS Act, but despite bipartisan support and intense lobbying by the chip industry, congressional wrangling has prevented any actual funding. A scaled-back CHIPS Act funding bill advanced in the Senate last week, making it more likely that federal subsidies will be reduced by about $3 billion from the $10 billion price tag Intel wants to sign off on for each new plant it builds.

About 12 percent of chips are currently made in the United States, down from 37 percent in 1990, according to the 2021 Semiconductor Industry Association.

One of Intel’s key allies is the U.S. military, which doesn’t like the idea of having a foreign country responsible for building the electronic brains in every fighter jet, cruise missile and set of night vision goggles. in November, the U.S. Department of Defense announced a partnership with Intel and other U.S. semiconductor companies to promote a chip ecosystem based on Intel’s upcoming 18A manufacturing process, which, due to accelerated timing, will be the end of 2023.

Qualcomm also announced its enthusiasm for Intel 18A in 2021, but the partnership is still in more of an evaluation phase as the technology evolves.

Intel has a lot on its plate. TSMC is by far the largest foundry and has been investing aggressively, including building a new factory near Intel’s home base of Phoenix. And Samsung has beaten Intel and TSMC in the race to advance chips by redesigning transistors, the core electronic data-processing components on chips. In June, Samsung said it had started producing transistors in a design it calls “Gate All Around” that reduces power consumption and improves performance.

MediaTek’s competitors are companies such as Qualcomm and Samsung, which make smartphone processors and wireless network modem chips. It chose Intel, in part, to have more chip procurement options. Intel’s production will help “create a more diverse supply chain,” said N.S. Tsai, senior vice president at MediaTek. We look forward to building a long-term partnership.”

The ongoing global chip shortage in 2020, triggered by the COVID pandemic, has heightened concerns about the supply chain. Scarce processors have hampered deliveries of everything from Ford F-150 pickup trucks to Sony PlayStation 5 game consoles.

MediaTek will use an improved version of Intel’s decade-old 16-nanometer manufacturing process to make chips for home appliances and other IoT devices. By contrast, TSMC uses a more modern 4-nanometer manufacturing process to make MediaTek’s high-end product, the new Dimensity 9000 smartphone chip.

But IFS faces many challenges. Intel has historically had its own chip design tools and custom manufacturing processes for its own chip products. Adapting to external chip design required a profound business and operational transformation. And the chip foundry’s biggest customers are Intel’s direct competitors, such as AMD, NVIDIA, Apple and Qualcomm, who are likely to be uneasy about relying on Intel.

As an “anchor” for IFS, MediaTek is helping Intel learn how to build its business to compete with Samsung and TSMC, Thakur said.

For example, the company no longer relies on Intel’s own chip design tools, but has fully embraced software that others in the industry have long embraced. It physically isolated the factory floor space for its foundry customers and had a similarly separated computer system. Intel also began streamlining its own processes so outsiders could better understand them, and hired more than 70 employees from rival foundries, he said.

“Our ability to sit across from customers and talk in foundry language is greatly enhanced,” Thakur said.” The people we’re bringing in from the outside are helping us work as a foundry and are no longer the single Intel we were before.”

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Threza Gabriel
Threza Gabrielhttps://www.techgoing.com
TechGoing is a global tech media to brings you the latest technology stories, including smartphones, electric vehicles, smart home devices, gaming, wearable gadgets, and all tech trending.
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