AMD might be the latest Silicon Valley giant to join the Intel bailout parade as there are rumors that AMD is in talks to become an Intel Foundry customer, according to a report from Semafor.
The report cites the usual “people familiar with the matter,” but does not say just how much of AMD’s business would move to Intel. AMD splits its business between TSMC, and GlobalFoundries, a chip manufacturer formed in 2008 when AMD sold off its fabrication facilities.
[ Related: More AMD news and insights ]
That was about all the report said, stating that Intel does not currently have the technology to manufacture AMD’s most advanced chips. But that’s not entirely true. AMD uses 7nm and 5nm process nodes for both its CPUs and GPUs, and Intel is capable of both and then some.
AMD did not respond to a request for comment. Intel declined to comment.
The notion of these two companies working together may seem over-the-top over, but the two firms are already joined at the hip. In 2004 Intel licensed AMD’s x86-64 64-bit extensions, and they are still used in every Intel processor to this day.
So such a deal is plausible, says Anshel Sag, principal analyst with Moor Insights & Strategy. “I think it’s entirely possible, especially if AMD is being expected to manufacture in the US for defense contracts and supercomputer deals,” he said.
[ Related: More Intel news and insights ]
AMD has lagged behind Nvidia in the AI business but has done well in the federal supercomputing business, holding numerous top spots with supercomputers like El Capitan and Frontier. Manufacturing its chips in the United States would be a good way to get the Trump administration off its back given its push for domestic manufacturing of semiconductors.
The Trump administration is pushing for 50% of chips sold in America to be manufactured domestically, and tariffs on chips that are not. It also faces outbound restrictions. Earlier this year, AMD faced export restrictions GPUs meant for China as part of U.S. export controls against China’s AI business.
“I believe this is a smart move by AMD to secure capacity in the local market without fighting against Nvidia and Apple and their deeper pockets for the limited capacity at TSMC,” said Alvi Nguyen, senior analyst with Forrester Research.” With the US investment in Intel, followed by Nvidia, this is can be seen as diversifying their supply chain and providing cheaper, locally sourced parts.”
For Intel, this will continue a streak of good news it has enjoyed recently. “Having customers take up capacity at their foundries will go a long way in legitimizing their semiconductor processes and hopefully create the snowball effect of getting even more US-based customers,” said Nguyen.
In recent weeks, Intel has partnered with Nvidia to jointly make PC and data center chips. Nvidia also took a $5B stake in Intel. Earlier the Trump administration made a $11.1B, or 10%, stake in Intel.
