Intel bags deal to make chips for MediaTek, that other Android processor designer

Intel will manufacture chips for Taiwanese chip designer MediaTek, making the latter the first major silicon customer for Intel's revitalized contract chip manufacturing business.

The American x86 giant is expected to announce MediaTek as a marquee customer for Intel Foundry Services Monday, more than a year after the chipmaker rebooted the business to compete with Asian foundry giants TSMC and Samsung as part of CEO Pat Gelsinger's comeback plan.

MediaTek was the fourth largest fabless chip designer in 2021, larger than AMD, but smaller than Broadcom, Nvidia, and Qualcomm. Its revenue was $17.6 billion last year, a 61 percent annual increase, largely thanks to smartphone phone chip sales. As well as Android handsets, MediaTek also designs chips for cars, Chromebooks, tablets, networking products, plus IoT and smart home devices.

Designed in the East, manufactured in the West

Intel said the arrangement will give MediaTek a "more balanced, resilient supply chain" by giving the Taiwanese company "significant" manufacturing capacity in the United States and Europe.

MediaTek executive NS Tsai said the move, which will involve chips for smart edge products, is part of its "multi-sourcing strategy." This means the company will continue to use rival foundries such as TSMC for other products.

"With its commitment to major capacity expansions, [Intel Foundry Services] provides value to MediaTek as we seek to create a more diversified supply chain," said Tsai, head of the company's platform technology and manufacturing operations. "We look forward to building a long-term partnership to serve the fast-growing demand for our products from customers across the globe."

The development represents a reversal of sorts in the world of fabless chip designers, where American firms including AMD and Nvidia have relied on Asian foundries such as TSMC and Samsung. Now MediaTek, a Taiwanese fabless chip designer that has relied heavily on its neighbor TSMC, is turning to an American manufacturer for expanded production in the West.  

An expected boost to a modest business

Jason Gorss, an Intel spokesperson, told The Register the company expects the MediaTek engagement to result in "significant wafer volumes and revenue" for the foundry business.

As Intel reported in April, the foundry is in its very early days, having only brought in $283 million in sales for the first quarter [PDF], a small fraction of the $18.4 billion Intel recorded that period. This was a 175 percent increase over the same period last year. The main drivers were rising demand for automotive chips, shipments of nano-fabrication equipment, and early foundry engagements with Amazon Web Services and Cisco.

While an Intel press release, due out today, stated MediaTek will use the chipmaker's "advanced process technologies," Gorss said the Taiwanese chip designer plans to initially use the Intel 16 node to produce "multiple chips for a range of smart edge devices." Intel 16 is an older process than new nodes being rolled out such as Intel 7 and Intel 4. The node debuted in 2017 when it was then known as Intel's 22FFL (FinFET Low Power), though the company claims it's comparable to 16nm offerings from other foundries.

"We anticipate a long-term partnership that could span multiple technologies and applications," Gorss said of Intel's work with MediaTek.

A new direction for Intel

The engagement with MediaTek will help begin Intel's transformation from an integrated device manufacturer (IDM), where the company mostly fabs the processors it designed, to a hybrid IDM-foundry business that will also rely on rival foundries to make certain parts.

Gelsinger has referred to this strategy as IDM 2.0, which he believes is key for his company making a comeback after falling behind TSMC and Samsung in leading-edge manufacturing technologies. At the same time, Intel plans to increase its reliance on other foundries to manufacture certain chips, with the goal of delivering the best products possible.

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Gorss declined to say when Intel will begin manufacturing chips for MediaTek, though he did say Intel will be ready to tape out Intel 16 chips for foundry customers this year while the initial ramp in volume production for the node will happen in early 2023.

While Intel said it plans to manufacture MediaTek chips for smart edge devices, we were not able to narrow down which products exactly these chips are being made for. Gorss said MediaTek's smart edge products range in category from smart home and IoT to networking and connectivity.

MediaTek did not respond to a request for comment.

One tantalizing thought is the fact that MediaTek has been a long-time user of the Arm instruction set architecture. This means that Intel, x86's biggest champion, could potentially be manufacturing Arm chips for MediaTek.

It wouldn't be a surprise, given that Intel has vowed to open its factories for chips based on not just x86 but also the Arm and RISC-V ISAs. But the new direction in neutrality, combined with its revitalized foundry push, is nevertheless a sign of how Intel, after suffering from years of manufacturing setbacks, is letting go of past notions with the hope that it can make the company bigger and better than ever before. ®