AMD and Intel discuss potential chip production partnership
Advanced Micro Devices (AMD) is reportedly exploring a collaboration with Intel to utilize the latter's manufacturing facilities for chip production. This unusual alliance comes as Intel seeks to bolster its foundry business amid financial losses. The discussions remain preliminary, with no firm commitments announced.
In a surprising development in the semiconductor industry, AMD is in talks with Intel about using the chip giant's foundries to produce its processors. The information emerged from a report by Korean media outlet ETNews, citing sources familiar with the matter. This potential partnership highlights the shifting dynamics in chip manufacturing, where competition often gives way to strategic necessities.
Intel has been aggressively expanding its foundry services as part of its IDM 2.0 strategy, aiming to manufacture chips not only for itself but also for other companies. However, the division has faced challenges, reporting a $7 billion operating loss in 2023. By partnering with AMD, Intel could fill its production capacity and generate revenue from external clients. AMD, traditionally reliant on Taiwan Semiconductor Manufacturing Company (TSMC) for its Ryzen and other CPU production, may be looking to diversify its supply chain amid global tensions and capacity constraints.
AMD CEO Lisa Su has previously indicated openness to external foundries, stating in earnings calls that the company is evaluating options to meet demand. The ETNews report specifies that the discussions focus on Intel's facilities in the United States, such as those in Arizona and Ohio, which are ramping up advanced manufacturing nodes like Intel 18A.
No timeline has been provided for any agreement, and both companies have declined to comment officially. Industry analysts view this as a pragmatic move; Intel needs customers to justify its investments, while AMD could benefit from geographically diverse production closer to key markets like the US. However, challenges remain, including aligning on technology processes and intellectual property protections.
This comes at a time when the US government is pushing for domestic semiconductor production through the CHIPS Act, which has allocated billions to Intel and others. A deal between these longtime rivals could accelerate that goal, potentially producing AMD's Ryzen CPUs on Intel's lines in the future—though experts doubt it will happen imminently due to integration complexities.
The semiconductor sector has seen other unexpected collaborations, but AMD-Intel talks underscore the industry's maturation, where survival often trumps rivalry.