Intel (INTC) held its first annual conference for its foundry business on Wednesday, where the chipmaker announced the launch of the “first systems foundry for the AI era,” a collaboration with chip designer Arm (ARM), and publicly traded tech giant Microsoft (MSFT) as a new Intel Foundry customer, among a host of updates. The chipmaker also discussed plans to become the world’s second-largest foundry by 2030, as well as increasing government funding amid growing demand for artificial intelligence (AI) technology.
Microsoft becomes Intel Foundry’s latest customer
Intel has named Microsoft as its latest customer for its custom chip business. The technology giant, which has established itself as a leader in the field of AIannounced plans to produce chips using the Intel 18A process.
“We are in the midst of a very exciting platform shift that will fundamentally transform the productivity of every organization and the entire industry,” Microsoft CEO Satya Nadella said at the event. He added that to achieve this vision, Microsoft needed “a reliable supply of the most advanced, highest performance, high quality semiconductors”, and said “that’s why we’re so excited about the idea of working with Intel Foundry and why we chose a chip design that we plan to produce on the Intel 18A process.
The deal with Microsoft could help Intel establish itself as a leading foundry while providing Microsoft with the hardware needed to run its AI technology.
Intel said the expected lifetime value of the Intel Foundry transaction is more than $15 billion in total across its wafer and advanced packaging segments.
Intel announces collaboration with Arm
Intel also announced a partnership with chip designer Arm for Intel Foundry to provide cutting-edge foundry services for Arm-based systems-on-chips (SoCs).
The companies said they would make co-investments and Arm would provide intellectual property at scale to “power this next wave of innovation.”
Arm shares have gained nearly 80% this year as a chip designer attracted the attention of investors as a major benefactor of the AI boom.
Working to become the world’s second largest foundry by 2030
Intel has said it is striving to become the world’s second-largest foundry by 2030, establishing a key position of strength in a market dominated by a few players.
At the head is Taiwan semiconductor manufacturing company (TSM), which controlled almost 58% of the market in the third quarter of 2023, according to figures from TrendForce.
In comparison, Intel Foundry captured 1% of the market during the same period. Together, the 10 largest foundries accounted for about 95% of the market.
Government Contracts and CHIPS Act Funding
Intel reported that the US government had awarded the company a billion-dollar contract “to create this trusted and secure environment”, and said it hoped to benefit from CHIPS Act funding.
US Secretary of Commerce Gina Raimondo joined the event and said the Biden administration is working to strengthen the country’s position in the chip industry amid the AI boom.
Intel Foundry’s growth could help the United States gain a greater share of the global semiconductor manufacturing market, currently dominated by Taiwan, thanks in large part to TSMC.
Intel CEO Pat Gelsinger said that while Intel had not yet announced its CHIPS grant, an announcement would be coming “very soon.”
