Admittedly, it's not the best of times for the Taiwan Semiconductor Manufacturing Company (TSMC). Just yesterday, it has had two new developments that challenges its dominance as the world's top contract chip-maker. Its Korean rival Samsung has become the first company to ship the new 3nm chips, even though the Taiwanese company was the first to set out on the project. It is still stuck in production stage, and its 3 nm chips are expected only in the latter half of the year.
And the second development was: TSMC has so far handled MediaTek's, the fabless chipmaker's, business. Mediatek, for the record, supplies processors for smartphones made by OnePlus, Samsung and others.
As it happens, now MediaTek has announced a strategic partnership to manufacture chips using Intel Foundry Services’ (IFS) advanced process technologies. MediaTek will use Intel Foundry Services to manufacture new chips for a range of smart edge devices. Mediatek's business with TSMC stays. But with competitors like Intel breaking new barriers, TSMC will be under increasing pressure for sure.
The new agreement will help MediaTek build a more balanced supply chain through the addition of a new foundry partner with significant capacity in the United States and Europe.
As it stands now, TSMC is responsible for building chips for Nvidia, AMD, Apple, Broadcom, MediaTek and many other large firms.
Smart move from Intel
In a sense, this turnaround augurs well for Intel, as its own manufacturing problems and also the rise of TSMC and Samsung stalled its rise in recent times. The new partnership with MediaTek will help Intel Foundry Services expand and transform its contract manufacturing business.
"As one of the world’s leading fabless chip designers powering more than 2 billion devices a year, MediaTek is a terrific partner for IFS as we enter our next phase of growth," IFS President Randhir Thakur said. "We have the right combination of advanced process technology and geographically diverse capacity to help MediaTek deliver the next billion connected devices across a range of applications."
NS Tsai, corporate senior vice president of Platform Technology & Manufacturing Operations at MediaTek, said, "MediaTek has long adopted a multi-sourcing strategy. We have an existing 5G data card business partnership with Intel, and now extend our relationship to manufacturing smart edge devices through Intel Foundry Services. With its commitment to major capacity expansions, IFS provides value to MediaTek as we seek to create a more diversified supply chain."
Intel set up its foundry service in 2021 as the global demand for advanced semiconductor manufacturing capacity surged. Intel recently announced factory expansions at existing sites, as well as plans for major new investments in greenfield sites in Ohio and Germany.
MediaTek has 38% of the smartphone application processor market in the first quarter, making it the biggest company in the segment. Having it as its client will doubtless help Intel Foundry Services.
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