The semiconductor industry has been facing numerous challenges in recent years, from supply chain disruptions caused by the pandemic to geopolitical issues related to Taiwan. In an effort to mitigate these risks, MediaTek has announced a partnership with Intel Foundry Services (IFS) to manufacture some of its processors.
MediaTek, a company that has gained significant momentum in the smart devices business over the past two years, will now be able to diversify its manufacturing operations by working with IFS. This will not only protect MediaTek from potential supply chain shocks, but it will also allow the company to tap into Intel's manufacturing capabilities in the USA and Europe.
IFS currently operates 22nm Fabs, which could be used to manufacture MediaTek's Wi-Fi chipset line of products. However, the specific products that Intel will work on have not been disclosed. This partnership is a big win for IFS as MediaTek is a major player in the smart devices market.
On the other hand, MediaTek has traditionally contracted TSMC in Taiwan to manufacture most of its chips. While TSMC is a highly capable manufacturer, it is also a single logistical chokepoint that could be affected by natural disasters or geopolitical issues. By diversifying its manufacturing operations, MediaTek is taking steps to make its supply chain more resilient.
It's worth noting that the semiconductor industry is facing significant challenges at the moment, and it will take time for the industry to overcome these issues. However, diversification plans such as this partnership between MediaTek and IFS will help make the industry more resilient in the long run, even if the economics may not be as favorable as they were pre-2020.
In conclusion, the partnership between MediaTek and Intel Foundry Services is a strategic move that will help the former mitigate supply chain risks and diversify its manufacturing operations. This move will also benefit Intel Foundry Services as it will enable them to work with a major player in the smart devices market.