Intel Corporation is trying to become a significant player in the chip contract manufacturing market, but is in no hurry to name the key customers it has managed to attract. In general, the Intel boss assumes that Amazon, Google, Microsoft, Qualcomm, Apple or NVIDIA could ultimately be interested in the company’s services.
Recall that in May this year, NVIDIA founder Jensen Huang positively assessed the quality of test products released by Intel using new technological processes and also emphasized that he does not exclude the possibility of cooperation with the company headed by Patrick Gelsinger. However, concrete agreements are still a long way off, and other names are emerging among Intel’s contract customers. At the same time, Bernstein analysts do not rule out that NVIDIA will still become a customer of Intel in the contract business.
First of all, at the beginning of the current Intel management’s statements about expanding its contract business, the Taiwanese company MediaTek expressed its desire to join the camp of its customers. Secondly, Intel representatives at various industry events noted that the company has already deployed a production line in Ireland for the production of MediaTek chips for the needs of the automotive industry using the same Intel 16 process technology.
This year it became known that the first third-party recipients of chips manufactured using Intel 18A technology will be the American corporations Boeing and Northrop Grumman. In this context, the name Ericsson has somehow faded into the background, but this European manufacturer of telecommunications equipment will also become an Intel customer as part of the same lithography technology.
Adding to the intrigue was Intel management’s recent announcement that it had received an advance payment from one of its major contract customers that would be used to accelerate construction of a core production line in Arizona. In this state, the company will test and package chips manufactured in Ohio using Intel 18A technology at customer request. The Intel factory is still under construction at this point on the US map, and it recently became clear that it will not need advanced high numerical aperture lithography scanners for mass production of chips using Intel 18A technology.
The head of rival AMD, Lisa Su, notes Bloomberg, avoided a direct answer to the question about the likelihood of ordering chips from Intel and, traditionally, resorted to expressing compliments to TSMC. Analysts at Wolfe Research believe that it will be easier for Intel to win customers from Amazon, Alphabet (Google) or Microsoft since the chipmaker itself has not competed with them in the past. However, Intel representatives have already indicated that the company is ready to offer a range of services to its competitors – for example when it comes to testing and packaging chips with complex spatial arrangements. According to some reports, Amazon is only interested in the possibility of packaging Intel chips, but the company will produce crystals for them on the side. Qualcomm, which traditionally relies on multiple suppliers for chip production, is also interested in Intel’s future technological processes.
In an interview Bloomberg Gelsinger acknowledged that Intel needs to build a reputation in the contracting business, and that still has a long way to go because while TSMC and Samsung have been in the business for about 30 years, Intel only entered the contracting services market two years ago got in. Analysts at Wolfe Research emphasize that Intel needs to prove its reliability to future customers, since for many of them the choice of a chip supplier determines the profitability of the entire company. TSMC has a long-standing reputation in this regard.
Patrick Gelsinger himself in an interview Bloomberg admitted that a lot will depend on whether they decide to trust Intel “Companies like NVIDIA, Amazon, Google, Microsoft, Qualcomm or Apple”. Intel is expected to announce the name of the next major contract customer by the end of this year.