Intel Reboots Foundry Business in Partnership with Microsoft

On Wednesday, Intel announced the relaunch and expansion of its foundry services, with Microsoft as its first client in a $15.00 billion deal.

Moreover, it touted that its 18A manufacturing process can produce semiconductors on par with the best offerings of TSMC and Samsung. Microsoft CEO Satya Nadella expressed confidence in its newest collaborator’s capabilities to provide high-performance, high-quality semiconductors.

The biggest chipmaker in America cited the generative artificial intelligence (GenAI) boom and growing government support as its primary drivers. Intel is close to receiving over $10.00 billion in federal grants and loans from the CHIPS Act of 2022.

Insiders reported that the California-headquartered company will use the funds for domestic expansion, including its $20.00 billion Licking County project. The government subsidies may accelerate the completion of the semiconductor plant, which was delayed to 2026 amid funding issues.

Intel CEO Pat Gelsinger reiterated that the company is committed to becoming the world’s top 2 foundry by 2030. TSMC maintained its No. 1 position with a 57.90% global market share, followed by Samsung’s 11.70%.

Gelsinger added that the firm poured significant resources into completing the 18A process in two years. 18A shortens computing hops to enhance its chips’ latency and cache size, making them ideal for GenAI systems.

Microsoft Considers Intel Critical to Expansion

Nadella said Microsoft needs Intel to obtain enough semiconductors to support its expansion plans amid the ongoing GenAI arms race. The new partnership will reduce the Windows maker’s reliance on TSMC, cutting costs by sourcing AI chips domestically.

Furthermore, the tech giant intends to form strategic partnerships with more tech companies to help navigate the global semiconductor shortage. For instance, it is developing a new network card to support OpenAI in accelerating the training of large language models.

In addition, Microsoft proclaimed its support for OpenAI CEO Sam Altman’s $7.00 trillion proposal to expand global semiconductor production. Domestically, it will help Intel become the AI industry’s new workhorse and a major player in the machine-learning market.