Intel signs Microsoft as foundry customer; Says the company is on track to overtake its biggest rival TSMC

Intel said Wednesday that Microsoft plans to use its services to build a custom computing chip and give the company an internal timeline of 2025 to overtake its biggest rival, Taiwan Semiconductor Manufacturing Co., in advanced chip manufacturing. Expected to exceed the limit.

The US chip maker also provided new information about how it plans to maintain its lead over TSMC in 2026 and beyond.

Intel made the revelation at an event in San Jose, California, at the first technology conference for Intel Foundry, the contract manufacturing operation set up to compete with TSMC.

Intel says it plans to retake responsibility for making the world’s fastest chips from TSMC later this year with what it calls Intel 18A manufacturing technology and replace that leadership with a new technology called Intel 14A by 2026. Will increase till.

It said Microsoft will use its 18A technology to make an undisclosed chip and now expects a $15 billion foundry order, up from the $10 billion order the company had previously told investors.

TSMC said it had “no comment on the competitiveness of our advanced technologies” other than what its CEO CC Wei said at the company’s last investor conference in January.

TSMC’s Taipei-listed stock has jumped nearly 17% so far this year due to its dominance in the production of advanced chips used in AI applications by companies such as Nvidia.

The news from 14A Technology is the first time the Silicon Valley company has detailed its plans beyond 2025. That’s the time frame since Intel CEO Pat Gelsinger took the reins three years ago to take over the chipmaking crown.

For decades, Intel made chips only for itself and used its leadership in manufacturing to create a cycle in which it created chips with industry-leading performance and charged a premium for them. In turn, those margins helped prop up the manufacturing sector. But as Intel lost its manufacturing lead, its chips became less competitive and margins declined, reducing the source funding for a manufacturing rebound.

Now, Intel is counting on potentially billions of dollars in U.S. government subsidies and business from outside customers to help it get back on track.

It is expected that some customers will be tempted by its long history of operating state-of-the-art factories on multiple continents, particularly those concerned about TSMC’s practice of maintaining its most advanced factories in Taiwan.

Stu Pan, the executive who oversees the Intel foundry, said of the company’s geographic diversity, “It’s a sales pitch that’s resonating right now. People want it.”

Intel says four “large” customers have signed up for its 18A manufacturing technology, but it hasn’t yet named them. It’s not clear whether Microsoft is among those economically significant customers.

Intel said Wednesday it is partnering with Arm Holdings to make it easier to make chips with Arm technologies in its factories. Intel also said it would work with the University of California, Berkeley and the University of Michigan to give students access to its 18A manufacturing technology.

Intel also has a special technology that analysts say will be useful for speeding up power-hungry artificial intelligence chips. Nvidia, the leader in the AI ​​chip market, has said it is evaluating Intel’s manufacturing technology, but the two companies have not announced any deal.

“Intel’s effort to woo outside customers is key to the turnaround story,” said Ben Bajarin, chief executive of consulting firm Creative Strategies.

“Unfortunately, that’s an unanswered question, because it’s a two to three year journey before we know if it’s working.”

© Thomson Reuters 2024

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