ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / NEWS

Intel and Microsoft Team Up For Custom Chip Deal Worth Over $15 Billion

With this, Intel plans overtake Taiwan Semiconductor Manufacturing Co in advanced chip manufacturing.
PUBLISHED FEB 22, 2024
Signage with logo at the Silicon Valley headquarters of Intel | Getty Images | Photo via Smith Collection/Gado
Signage with logo at the Silicon Valley headquarters of Intel | Getty Images | Photo via Smith Collection/Gado

Intel has announced a new partnership with tech giant Microsoft for manufacturing custom computing chips. The chipmaker stated that Microsoft plans to use its services to manufacture and beat an internal deadline of 2025 to overtake its biggest rival, Taiwan Semiconductor Manufacturing Co (TSMC), in advanced chip manufacturing. The announcement was made during Intel’s foundry event. The company claims that Intel Foundry’s expected lifetime deal value is over $15 billion, Reuters noted.

An Intel chip is seen in a circuit board | Getty Images | Photo by David Silverman
An Intel chip is seen in a circuit board | Getty Images | Photo by David Silverman

Intel said Microsoft will use its 18A technology to make an undisclosed chip. The new $15 billion value of the Foundry’s deal is up from the $10 billion that the company had earlier told investors to expect.

While it is not clear what the chips will be used for, Bloomberg noted that Microsoft has been planning in-house designs for both processors and AI accelerators. As a part of the deal, the custom chips will designed by Microsoft and for Microsoft.

For Intel, it plans to retake the title of making the world's fastest chips from TSMC with its Intel 18A manufacturing technology and extend that lead into 2026 with another innovation called Intel 14A.



 

With the announcement of the 14A technology, it is the first time that Intel has given details of its plans beyond 2025. The chipmaker also announced that it is partnering with Arm Holdings to make it easier to make chips with Arm technologies in its factories. Further, the firm will work with the University of California Berkeley and the University of Michigan allowing students access to its 18A manufacturing technology.

Intel’s special technology is expected to be useful for speeding up power-hungry artificial intelligence chips. So far, Nvidia has been the leader in the AI chip market, and Microsoft has been one of its biggest buyers.

Intel’s new foundry plans come at a time when more and more companies are looking to produce their self-designed chips. However, Intel has some challenges to overcome. The company recently pushed back the opening of a $20 billion Ohio chip plant to 2026 citing a slowdown in the market and delays in government grants.

For decades, Intel made chips for itself and used its lead in manufacturing to charge a premium for its chips. This helped the company fund manufacturing advances for a long time before the company lost its lead.

Further, since the release of ChatGPT, tech companies, including Microsoft and Google, have scrambled to build their own AI models to compete. This has led to high demand for advanced chips which was fulfilled by Nvidia. However, tech giants are struggling to get enough of Nvidia’s advanced chips, as supply is far behind demand.



 

Now, Intel’s foundry plan comes as it potentially looks for billions of dollars in U.S. government subsidies and business from outside customers, to get back on track.

For Intel, partnering with Microsoft will boost its made-to-order chip business. A company spokesperson said the company is “delighted that Microsoft has selected a chip to design using Intel 18A process technology,” in a statement shared with Quartz.

On the other hand, Microsoft previously announced that it was rolling out two new chips to its data centers this year. The Azure Maia Accelerator is built for AI applications, and the Azure Cobalt CPU is for general-purpose computing. The firm also said it was testing its AI products, including Bing and Office AI, with its AI chip.



 

In a statement, Microsoft CEO, Satya Nadella said that the company is in the middle of a platform shift that will transform productivity. “To achieve this vision, we need a reliable supply of the most advanced, high-performance, and high-quality semiconductors. That’s why we are so excited to work with Intel Foundry, and why we have chosen a chip design that we plan to produce on the Intel 18A process,” Nadella said.



 

Thus, by partnering with Intel Microsoft could see a boost to its chip options, and lead to progress in its development of AI products.

MORE ON MARKET REALIST
The company received multiple complaints from customers finding wiry pieces of metal in the product.
19 hours ago
The survey results were nothing like any of them had anticipated.
19 hours ago
The soon to be birthday girl, Ja-Juana fell into temptation and lost the big prize.
20 hours ago
The player, Gary got too excited and almost tore down the prize board off the roof.
1 day ago
The player, Megan Zandrowicz, walked away with a fantastic $65,000 from the show.
1 day ago
In the end, the guest regretted using the beautiful Mettlach Cameo Platter for her parties.
1 day ago
The contestant Mary, won a trip to Vancouver as a perfect birthday present.
3 days ago
The player was in for another heartbreak after she failed to solve the puzzle.
3 days ago
The player, Elisa Butcher's risky dice roll stunned everyone as she won a brand new Volkswagen car.
3 days ago
The star of Boyz II Men got sentimental after looking at the item from their first album cover.
4 days ago
It wasn't an ordinary ring but the 2004 Patriots Super Bowl Ring, which Harrison refused to let go.
5 days ago
Harvey was in disbelief after he misheard what Ming-Na Wen's teammate said.
5 days ago
Harvey could feel the pain as he collected the answers from the contestants.
5 days ago
The owner of Harry Karstens' First Ascent Denali Ice Axe was shocked to learn how valuable it was.
6 days ago
As model Rachel Reynolds slammed on the brakes, fellow presenter Alexis Gaube nearly fell over.
6 days ago
Harvey couldn't believe his eyes when an answer did not show up on the board.
7 days ago
The winner, Trish yelled "This cannot be happening!" as she sat in her new car.
7 days ago
Harvey was shocked to see some of the answers show up on the board.
7 days ago
The seemingly tough puzzle cost contestant, Kelly Amodio a brand new Mini Cooper.
7 days ago