Intel Foundry Services Announces MediaTek As First Wafer Customer


It has been over a year since Intel CEO Pat Gelsinger announced Intel's re-entry into the foundry business with Intel Foundry Services. Late last month, Intel announced that the company gained its first official wafer fabrication customer with MediaTek. Although other companies like Amazon and Qualcomm have signed up to use packaging and processing technology, MediaTek is the first substantial wafer customer. IFS is opening several fabs in the United States and Europe in the coming years, which has many strategic benefits for semiconductor companies. 

If semiconductor companies can leverage Intel's technology while building supply chain resiliency, it's a win for both parties. In the last two years, we learned a hard lesson on why having a diverse global supply chain matters. Let's dig into what these announcements mean for Intel and MediaTek. 

About MediaTek 

While the average consumer might not know who MediaTek is, the company is the 4th largest fabless semiconductor company in the world. MediaTek chips power many devices, including smartphones, tablets, Chromebooks, automotive, and many other IoT devices. MediaTek chips power more than 2 billion devices every single year. Some other interesting stats you can access on its website is that MediaTek's technology is in 20% of homes and is represented in 1 in 3 smartphones. So while the company doesn't have the brand recognition of Intel, it is a significant player in the semiconductor space with diverse applications.


While MediaTek may be more know for IoT devices and smartphones, the company has its sight on other devices and already has a healthy grasp on the Chromebook market with its Kompanio CPUs. These are especially good at providing good performance with low power consumption.

When IFS was announced last year, I didn't think it would take long to get significant customer support. Intel Foundry Services offers a diverse range of products, including packaging, processing, and IP optimized for high performance, low power, and always-on connectivity. With this partnership, MediaTek can accomplish several critical strategic goals. The first is strengthening its supply chain resiliency. If there's anything we have learned in the last two years, a strong and diverse supply chain matters greatly, especially in times of chaos. Secondly, this partnership allows MediaTek to meet its product demand quickly. The more fabricator options that MediaTek has, the easier it is to secure a supply of wafers.


I'm sure this partnership will eventually span to newer generations of processing technology, but for now, MediaTek will start manufacturing with Intel 16. The company will use multiple different chips for smart edge devices. MediaTek didn't specify which devices will be supported with these chips; these will likely be on the lagging edge, and I could see devices like smart TVs being in the mix. We know that a range of devices will be supported, from smart home and IoT to networking and connectivity. I hope we can dig into a little more detail soon. We discussed the IFS and MediaTek announcement in episode #132 of the Six Five Podcast. You can watch the full video here.

When fabless semiconductor companies enter agreements with fabricators, its usually for the long haul. The fab business is very sticky, so getting such a prominent player like MediaTek is the right way to come out of the gate.

Wrapping up 

Since MediaTek has broken the ice as the first wafer customer for Intel Foundry Services, I can see other significant partners jumping on board soon. There is demand for more foundry services in the U.S. & Europe, and you must believe companies will want to work with Intel as the company is a market leader in IP, processing, and packing technology. This partnership announcement is evidence that Intel is executing its IDM 2.0 strategy. I wrote about the IDM 2.0 strategy in-depth, and you can access that here.

It takes time to get a fab up and going, and as the need for computing power continues to grow, I expect a steady uptick in demand for IFS as we go through the next couple of years. Intel's investment in IFS is a long-term play, and we already see the fruit of these long-term bets with MediaTek becoming the first wafer customer. Congrats to MediaTek on strengthening its business with a more resilient supply chain and to Intel Foundry Services on its first official wafer customer.

I look forward to hearing more news about IFS growing its customer base soon.

Patrick Moorhead

Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.