Intel lands $15B deal to produce custom chips for Microsoft
What's the story
Microsoft and Intel are teaming up in a $15 billion deal to create custom chips designed by Microsoft for its own use. The news was revealed during Intel's Foundry event, where Microsoft CEO Satya Nadella said, "We are in the midst of a very exciting platform shift that will fundamentally transform productivity for every individual organization and the entire industry."
Technical insight
Chips to utilize Intel's 18A process
These custom chips will be made using Intel's 18A process, a key part of the company's plan since CEO Pat Gelsinger returned. Intel hopes to reclaim its spot as a top chipmaker through its foundry services, with Microsoft as its first major client. This approach is similar to what Taiwan Semiconductor Manufacturing Company (TSMC) has done, partnering with big names like Apple, Qualcomm, and AMD.
The challenges
Challenges ahead for Intel's foundry plans
However, Intel faces some hurdles in its foundry ambitions. The opening of a $20 billion chip plant in Ohio has been pushed back from 2025 to 2026 due to a sluggish chip market and delays in government grants. As more companies look to create their own custom chips, Intel must overcome these challenges to successfully compete in the ever-changing chip manufacturing world.