Microsoft To Use Intel’s 18A Fabrication For Its Custom Chips

As a part of Pat Gelsinger’s IDM 2.0 strategy to revitalize Intel’s chipset fabrication business - Intel Foundry Services, Intel has announced a $15 billion deal with Microsoft at its Intel Foundry Direct Connect event. Intel Foundry Services will be manufacturing Microsoft-designed ARM-based chipsets. These are custom chipsets that Microsoft has designed for its data centres, which will handle both general-purpose computing and AI acceleration workloads.

“We are in the midst of a very exciting platform shift that will fundamentally transform productivity for every individual organisation and the entire industry,” said Microsoft CEO Satya Nadella in the official press release. Intel has revealed that these chipsets will be based on the incoming Intel 18A process. With 18A, Intel believes that it will reestablish chipset manufacturing ascendancy over TSMC, which had usurped it as the world’s most advanced fab and the one with the largest customer base.

Under CEO Gelsinger’s leadership, IDF is now hived off as a separate business unit, which enables it to service Intel’s competitors like Qualcomm, Nvidia, and AMD. In fact, Gelsinger said that he would want to make chips for Apple, which recently replaced its Macs with custom silicon from Intel’s chips and AMD, Intel’s longtime rival. Apple and AMD outsource the manufacturing of their chips to TSMC.

Intel has new foundry plans as it diversifies the chipset manufacturing supply chain. It is going to be making a massive $20 billion fab in Ohio, for which it is also getting support from the US government, which has released a chips act. Aside from this, Intel also announced plans for its new 14A process which will be the successor to 18A. Intel also conveyed momentum with customers like Synopsys, Cadence, Siemens and Ansys. It also revealed that Intel’s chipset packaging expertise was being leveraged by Amazon.

Intel aims to be the world’s second largest foundry by 2030. It has fallen behind TSMC and Samsung in the last decade after being the leader of the semiconductor manufacturing for half a century with one of its founders, Gordon Moore, being the creator of Moore’s Law, the most important principle of the modern consumer electronics industry.