Samsung faces more competition as Intel enters the contract chip manufacturing space

Samsung Foundry is the world’s second-biggest contract chip manufacturing firm. While the company is spending hundreds of billions of dollars to defeat its primary rival, TSMC, it has found a new competitor in the space: Intel. The company used to design and manufacture its own chips, and last year, Intel opened its foundry service for other firms.

Intel announced yesterday that it would start manufacturing chips for MediaTek soon. The company hasn’t officially revealed which kind of chips it will fabricate or the process node that it will use. However, reports indicate that the US-based firm will use its Intel 16 process to manufacture a range of chips used in smart devices. Intel 16 is an improved version of the company’s 22FFL process node, comparable to Samsung Foundry’s and TSMC’s 16nm processes.

The chips will be manufactured 18-24 months from now, which is a good deal for both Intel and MediaTek. Intel announced last year that it is opening its foundry service for other clients, and it is on the cusp of receiving huge grants to start making chips in the US. For MediaTek, which currently relies on TSMC for most of its chips, it is all about diversifying its supply chain.

If Intel’s first chip contract is successful, it could attract many clients. The company plans to make 3nm chips sometime next year and 2nm chips in late 2024. So, Samsung will face even more competition in the foundry industry in the coming years.

Since tensions escalated between China and the US (and other western countries), the US has invited chip manufacturing firms to set up their factories locally. Intel, Samsung Foundry, and TSMC have all announced plans to spend billions of dollars on setting up new chip plants or expanding the existing ones for the next few years.

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