Intel Wins Chip Deal from Microsoft, Outlines Plans to Overtake TSMC in Chip Manufacturing

Semiconductor major Intel revealed that software giant Microsoft intends to utilize its services to manufacture a custom computing chip, Reuters news report said.
Intel 4th Gen Xeon Scalable ProcessorsThis move signals Intel’s determination to surpass its main rival, Taiwan Semiconductor Manufacturing Co (TSMC), in advanced chip manufacturing, with expectations to outpace an internal deadline set for 2025.

The revelations came during an event held in San Jose, California, marking the inaugural technology conference for Intel Foundry, the company’s contract manufacturing arm established to rival TSMC. Intel outlined its strategy to regain its status as the producer of the world’s fastest chips, starting with the deployment of Intel 18A manufacturing technology later this year, followed by the introduction of Intel 14A to maintain its lead into 2026.

Microsoft’s decision to utilize Intel’s 18A technology for an undisclosed chip further underscores Intel’s growing momentum in the competitive chip manufacturing landscape. The company anticipates $15 billion in foundry orders, surpassing its earlier projection of $10 billion, indicating increasing confidence in its capabilities.

Intel’s unveiling of the 14A technology marks a significant milestone, providing insights into its plans beyond 2025, the deadline set by Intel’s CEO, Pat Gelsinger, to reclaim the chipmaking crown. Gelsinger, who assumed leadership three years ago, has been steadfast in his commitment to revitalizing Intel’s manufacturing prowess.

For decades, Intel’s dominance in chip manufacturing propelled its success, but when it lost its manufacturing lead, its chips became less competitive, impacting margins. Now, Intel is banking on substantial government subsidies and business from external clients to fuel its resurgence.

Geographic diversity is also a key selling point for Intel, with its long-standing presence across multiple continents appealing to customers wary of TSMC’s concentrated operations in Taiwan.

While Intel has secured four “large” customers for its 18A technology, including Microsoft, it is yet to disclose their identities. Additionally, Intel’s collaboration with Arm Holdings aims to facilitate chip production using Arm technologies, expanding its reach in the market.

However, challenges remain as Intel embarks on its turnaround journey, with the success of its efforts expected to unfold over the next two to three years. Nevertheless, analysts view Intel’s push to attract external customers as pivotal to its resurgence in the chip manufacturing arena, setting the stage for a transformative period in the industry.

Intel Foundry to Lead in Sustainable AI-Driven Systems

Intel Foundry is a sustainable systems foundry business tailored for the AI business. The company has received strong support from ecosystem partners like Synopsys, Cadence, Siemens, and Ansys, who stand ready to accelerate chip designs for Intel Foundry customers.

Intel’s ecosystem partners, including Synopsys, Cadence, and Siemens, declared readiness to support Intel’s process and packaging designs, ensuring accelerated chip design for Intel Foundry customers. Additionally, collaborations on assembly technology and design flows for advanced packaging solutions further underscored the industry’s commitment to innovation and collaboration.

Intel’s “Emerging Business Initiative” with Arm signifies a strategic partnership to provide cutting-edge foundry services for Arm-based system-on-chips (SoCs), supporting startups and fostering innovation in Arm-based technology.