Microsoft strikes multi-billion dollar custom chip deal with Intel

Microsoft has struck a potentially lucrative deal with Intel to have the latter make various custom chip designs for the tech giant.

Intel announced the deal at its Intel Foundry event, confirming that “Microsoft has chosen a chip design it plans to produce on the Intel 18A process”. The partnership could prove to be worth more than $15 billion over the life of the deal.

Microsoft, for its part, hasn’t mentioned any specifics as to what these custom-design chips might be used for. Microsoft Chairman and CEO Satya Nadella referenced “a reliable supply of the most advanced, high-performance and high-quality semiconductors” to power a “very exciting platform shift that will fundamentally transform productivity for every individual organization and the entire industry”.

According to Bloomberg, Microsoft is looking to provide in-house solutions for both regular processors and AI accelerators.

Intel’s ultimate aim is to retake its position at the top of the advanced chip making tree. It plans to overtake key rival Taiwan Semiconductor Manufacturing Co (TSMC), in advanced chip manufacturing in 2025.

Indeed, in adopting this model of building chips to other companies’ designs, rather than simply making its own chips and selling them on as we’ve seen in the Best Intel processors of the past, Intel can be said to have adopting the TSMC model. The Taiwanese chip giant makes chips to order for the likes of Apple and Qualcomm, which has helped it become the biggest in the game.