Microsoft Will Use Intel to Manufacture Home-Grown Processor
Intel Corp. has landed Microsoft Corp. as a customer for its made-to-order chip business, marking a key win for an ambitious turnaround effort under Chief Executive Officer Pat Gelsinger.
Microsoft plans to use Intel's 18A manufacturing technology to make a forthcoming chip that the software maker designed in-house, the two companies said at an event Wednesday. They didn't identify the product, but Microsoft recently announced plans for two homegrown chips: a computer processor and an artificial intelligence accelerator.
Intel has been seeking to prove it can compete in the foundry market, where companies produce custom chips for clients. It's a major shift for the semiconductor pioneer, which once had the world's most advanced chipmaking facilities and kept them to itself. These days, Intel is racing to catch up with companies like Taiwan Semiconductor Manufacturing Co., which leads the foundry industry.
Microsoft, meanwhile, is looking to secure a steady supply of semiconductors to power its data-center operations — especially as demand for AI grows. Designing its own chips also lets Microsoft fine-tune the products to its specific needs.
“We need a reliable supply of the most advanced, high-performance and high-quality semiconductors,” Microsoft CEO Satya Nadella said in a statement. “That's why we are so excited to work with Intel.”
Read More: Microsoft Unveils Its First Custom-Designed AI, Cloud Chips
The broader industry has struggled to get enough advanced silicon — particularly Nvidia Corp.'s highly prized accelerator chips, which help develop chatbots and other AI services.
For Intel, securing a large customer for its foundry business should help reassure investors that Gelsinger's comeback bid remains on track. His plan involves building out the chipmaker's factory operations to handle the increased load — a costly gamble — as well as restoring Intel's once-dominant technological prowess.
The company is looking to governments in the US and Europe to help
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