MediaTek and Intel have announced that some MediaTek processors will be manufactured by Intel Foundry Services (IFS). Currently, this Manufacturing Agreement is for “Smart Edge Devices,” a fairly vague description that could include anything connected to a Wi=Fi/4G/5G wireless network.
However, IFS is currently running 22nm (nanometer) fabs that could, for example, serve MediaTek’s line of Wi-Fi chipsets. We don’t have enough data to judge which products Intel will be working on.
It’s a big win for the fledgling (2021) Intel Foundry Services business as MediaTek has picked up a lot of momentum over the past two years, breaking records quarter after quarter. MediaTek has launched highly competitive platforms with a significant market share in the smart device business.
From MediaTek’s point of view, this is a diversification move as Intel is expected to expand/open manufacturing facilities (“fabs”) in the US and Europe. Such diversification would protect MediaTek from supply chain shocks like the ones we’ve seen since the pandemic or potential geopolitical issues surrounding Taiwan.
Unsurprisingly, MediaTek currently uses TSMC in Taiwan to manufacture most of its chips. Although TSMC does an excellent job of manufacturing, it is so large that in the event of a disaster, it could be a single logistical bottleneck. Aside from geopolitics, Taiwan is also subject to typhoons, droughts, and earthquakes.
It will likely take years for the semiconductor industry to overcome the current supply chain issues. However, the diversification plans would make it much more resilient than it is today, even though economic conditions may not be as optimal as they were before 2020.
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