Intel in early talks to add AMD as foundry customer - Semafor

Intel in early talks to add AMD as foundry customer - Semafor

Intel, in a strategic move to bolster its foundry business, is reportedly in early discussions with AMD to potentially add the latter as a foundry customer. This development, if realized, would be a significant step forward for Intel's turnaround plan, which centers around Intel Foundry Services (IFS).

Intel has been courting high-profile companies to fill its new fabs and regain economies of scale. The company is currently in talks with Apple about a strategic investment in its chip manufacturing division. If successful, this partnership would diversify Apple's chip supply and bolster Intel's standing with the U.S. government. AMD, a leading semiconductor company, could bring similar benefits to Intel's foundry efforts .

AMD, known for its high-performance GPUs, has been a key player in the semiconductor industry. Its collaboration with IBM to enhance AI infrastructure for Zyphra, a San Francisco-based company specializing in open-source AI research, highlights its strategic focus on AI and innovation. AMD's strong financial metrics, including a market capitalization of $263.02 billion, indicate its growth potential, despite some profitability challenges .

For Intel, securing AMD as a foundry customer would be a crucial win. The company is aiming to deploy advanced nodes over the next two years and needs major customers to fill its new fabs. AMD's inclusion could help Intel achieve this goal and challenge TSMC's dominance in the foundry market .

Intel's turnaround plan, which includes an aggressive process roadmap, structural changes, and cost-cutting measures, is designed to transform the company into a successful foundry. The company is also leveraging government support, with the U.S. government taking a 10% stake in Intel through the CHIPS Act funding .

The potential partnership between Intel and AMD, if it materializes, would be a significant development in the semiconductor industry. It would not only strengthen Intel's foundry business but also provide AMD with a secondary, U.S.-based supplier for its chips. This move could shake up the semiconductor landscape and challenge TSMC's dominance.