15 billion dollar deal: Microsoft lets Intel manufacture customised chips
Microsoft and Intel are finalising a chip deal that is said to be worth more than 15 billion US dollars. It includes customised chips whose area of application has not yet been revealed.
Whoever develops their own chips needs a contract manufacturer for semiconductor products - a foundry. TSMC, for example, is one such foundry that maintains partnerships with Apple, Qualcomm and others. And now Microsoft has decided to enter into a partnership with Intel for chips developed in-house.
Intel is to manufacture chips for Microsoft for no less than 15 billion US dollars. The company announced this at the "Intel Foundry Direct Connect" event. The chips ordered are to be manufactured using the 18A production process. According to Intel, this production generation will be the most advanced in the world from next year. The company intends to outdo even TSMC's offering with the 18A chip performance. Whether this will succeed remains an advertising promise for the time being.
Source: Intel
However, the stock market has at least reacted positively, presumably due to Intel's announcement of the deal: Intel shares were up 2.25 per cent to USD 44.45 in pre-market trading on the US stock exchange on Thursday. If Intel's 18A chips are anywhere near as good as the company's vision, further major orders should soon be pouring in. Intel's value and its position against its giant competitor TSMC should then be further strengthened.
Microsoft has not yet specified what the new chips will be used for. However, it is known that the company has planned its own new designs for both processors and AI accelerators. The most obvious possibility could be that the chips are new server CPUs. They could be used for the Azure Cobalt (server CPUs) and Azure Maia (server AI accelerators) projects. Theoretically, however, they could also be future chips for an Xbox or even their own CPUs for consumer products. However, the console is likely to continue to be supplied by AMD chips due to the previous collaboration.
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