On Wednesday, Intel (INTC.O) announced that Microsoft (MSFT.O) intended to employ its services for the production of a custom computing chip. The company also stated that it intends to surpass its largest competitor, Taiwan Semiconductor fabrication Co (2330.TW), in the fabrication of advanced chips, by 2025, ahead of schedule.
The US chipmaker also revealed fresh information about how it intends to keep ahead of TSMC until 2026 and beyond.
The disclosures were made by Intel during the inaugural technology conference of Intel Foundry, the contract manufacturing company it founded to take on TSMC. The event took place in San Jose, California.
With what it refers to as Intel 18A manufacturing technology, Intel claims it will reclaim the title of producing the fastest chips in the world from TSMC later this year.
It stated that Microsoft will create an unannounced chip using its 18A technology and that, contrary to what the company had previously informed investors to expect, it now anticipates $15 billion in foundry orders.
Beyond what its CEO C.C. Wei stated at the business’s most recent investor presentation in January, TSMC stated that it had “no comment on the competitiveness of our advanced technologies“.
Due to its dominance in developing the kinds of advanced circuits utilized in AI applications by businesses like Nvidia (NVDA.O), TSMC’s Taipei-listed shares has increased by over 17% so far this year.
The Silicon Valley corporation hasn’t disclosed any information about its plans beyond 2025 until now, with the announcement of 14A technology. Pat Gelsinger, the CEO of Intel, has set that timeframe.
For many years, Intel produced chips solely for its own use. By taking advantage of its manufacturing advantage, the company was able to produce chips with performance that led the industry and charged a premium for them. These margins in turn provided funding for advancements in manufacturing. However, Intel’s chips became less competitive and its margins declined as it lost its manufacturing lead, which drained the source funding for a manufacturing recovery.
To help it get back on track, Intel is now depending on possibly billions of dollars in subsidies from the US government as well as business from external clients.
It hopes that its extensive track record of running state-of-the-art plants across several continents will lure certain clients, particularly those who have reservations about TSMC‘s policy of keeping its most sophisticated facilities concentrated in Taiwan.
Right now, it’s a sales pitch that’s hitting home. Regarding the company’s geographic variety, Stu Pann, the executive in charge of Intel Foundry, stated that “people want that.”
Intel has not yet disclosed the names of the four “large” clients it claims to have signed up for its 18A manufacturing process. It’s unclear if Microsoft is one of those clients with significant financial influence.
On Wednesday, Intel announced a partnership with Arm Holdings (O9Ty.F) to facilitate the production of chips utilizing Arm technologies in Intel’s facilities. Additionally, Intel announced that it will collaborate with the Universities of Michigan and California Berkeley to make its 18A manufacturing technology available to students.
Additionally, according to analysts, Intel has a unique technique that will help speed up artificial intelligence chips that consume a lot of power. The market leader in AI chips, Nvidia, has stated that it is assessing Intel’s manufacturing expertise; however, no formal announcement has been made by the two businesses.
“The turnaround story is Intel’s efforts to attract outside clients,” Ben Bajarin, CEO of Creative Strategies, a consulting business, stated.
“Unfortunately, it’s an unanswered question, because this is a two-to-three-year journey before we have any inkling of knowing that this is working.”
