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HomeTech NewsIntel and Microsoft’s multi-billion dollar custom chip deal

Intel and Microsoft’s multi-billion dollar custom chip deal

At Intel’s Foundry event, the tech company announced a partnership with Microsoft as part of a $15 billion deal in which Intel would be responsible for the creation of custom chips for Microsoft.

This deal will focus on manufacturing chips that make use of Intel’s 18A process technology. Although specifics of the chip applications are yet unknown, it is likely that Microsoft is working on internal designs that could include processors and AI accelerators, which would be consistent with the company’s recent commitment to advancing its AI capabilities.

With excitement for the partnership, Microsoft’s CEO, Satya Nadella, said, ‘We are in the midst of a very exciting platform shift that will fundamentally transform productivity for every individual organisation and the entire industry.’

With the return of CEO Pat Gelsinger, the company’s vision has placed a lot of emphasis on Intel’s 18A technology. The chipmaker believes that regaining a major position in the highly competitive chipmaking sector depends on its foundry services.

This move reflects a similar strategy to the one taken by Taiwan Semiconductor Manufacturing Company (TSMC), a rival of Intel that manufactures chips using designs from other companies. Intel’s CEO compared TSMC’s successful playbook with alliances like Apple, Qualcomm, and AMD, acknowledging the role that Intel’s foundry plays in the company’s broader strategy.

Although it still faces obstacles, Intel’s latest foundry plans come as more companies look to create their own custom chips. Notably, Intel has postponed the $20 billion Ohio chip plant’s launch from its initial 2025 date to 2026, attributing the delay to the slowing chip market and the holding up of government funds.