Intel Foundry Inks Huge Deal for 12nm Chips with UMC

Intel's nascent Foundry Services business (IFS) has announced a sizable deal with Taiwan's second-largest foundry operation to manufacture 12nm chips in the future together. Intel and United Microelectronics Corporation (UMC) have announced a partnership that will begin to bear fruit in several years. Still, it's a feather in the cap for Intel, as it's sought to gain a foothold in the foundry business as an alternative to TSMC.

Intel announced that the two companies will collaborate on a new 12nm node targeting high-growth markets. It says the deal will help further its goal of giving companies in Taiwan more resiliency in their supply chain with its US-based operations. At the same time, UMC gets additional foundry capacity and the ability to "accelerate its roadmap." According to Tom's Hardware, Intel will manufacture the chips at three Arizona fabs, including Fab 12, 22, and 32. The "high growth" markets it's targeting with this mature process include mobile, communications infrastructure, and networking devices.

Though it's not exactly the sexiest announcement, it still gives Intel a beach head into the Taiwan market, and vice versa for UMC. Credit: Intel

The deal will see both companies making chips for UMC customers on a new 12nm FinFET process. Due to the maturity of the node involved, Intel will be able to reuse the tooling and machines it is currently using for 10nm and 14nm fabrication. This means less upfront investment will be required and allow UMC customers to transition to this "new" node from their existing older processes. Intel will soon begin to taper production of its existing 10nm and 14nm fabs to transition them to this new process, which will start cranking out new 12nm chips in 2027.

The deal will allow Intel to move into UMC's market, which is significant as it seeks to add new technologies to its roster of possible designs it can offer customers. Additionally, it'll give UMC a US-based workforce and chip supply, which could come in handy if there was ever any aggression by China towards the island of Taiwan.

The announcement indicates Intel is making notable strides with its foundry business, which is set to hold its first event in a few weeks. The event is called IFS Direct Connect, and it'll lay out the company's roadmap beyond Intel and give us a glimpse into what kind of fab services Intel will offer in the coming years.