Intel will produce Taiwan’s MediaTek chips

The logo of computer chip maker Intel appears on a gaming computer screen during the opening day of E3, the annual video game fair that unveils the latest gaming software and hardware in Los Angeles, California, US, June 11, 2019. REUTERS/Mike Blake/File Photo

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OAKLAND, California, July 25 (Reuters) – US chipmaker Intel Inc said on Monday it will produce chips for Taiwan’s MediaTek (2454.TW), one of the world’s largest chip designers.

The manufacturing arrangement is one of the most significant deals that Intel has announced since it launched its so-called foundry business early last year.

A foundry company builds chips that other companies design, and Taiwan Semiconductor Manufacturing Co (TSMC) (2330.TW) is the number one player in this field. Intel basically built chips it designed itself.

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“It’s a very big deal for us to engage customers from Taiwan and they are betting on us to grow and experience that. This is a major win for the customer,” Randhir Thakur, President of Intel Foundry Services, told Reuters.

Dan Hutcheson, chip economist at TechInsights, said there are skepticism in the industry about whether Intel can pull off the plumbing business, but the deal with MediaTek shows it’s on the right track and that its investments, including hiring the right executives, are paying off. its fruits.

“When you go to a foundry, you risk working for about two years,” Hutcheson said of the risks for chip design companies like MediaTek. “If something happens and the foundry can’t remove it, that design window is lost in that market window.”

While Intel did not provide any financial details of the deal or say how many chips it will produce for MediaTek, it said the first products will be manufactured in the next 18 to 24 months and will be in a more mature technology called the Intel 16 process, with chips used for smart devices.

“MediaTek has always adopted a multi-sourcing strategy,” MediaTek said in a statement. “In addition to maintaining a close partnership with TSMC on the advanced process contract, this collaboration will further enhance MediaTek’s supply of the mature process contract.”

Intel previously announced that its plumbing business has signed deals with Qualcomm Inc (QCOM.O) and (AMZN.O).

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Reporting by Jane Lanhe Li; Edited by Muralikumar Anantharaman

Our Standards: Thomson Reuters Trust Principles.

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