new York
CNN
—
Intel’s struggling chipmaking business received support from a high-profile customer on Monday: Amazon.
The announcement came after Intel said earlier the same day that the company would receive up to $3 billion in funding under the CHIPS and Science Act to manufacture chips for the military.
Intel Foundry and Amazon Web Services will jointly invest in a customized chip design for the latter and have “announced a multi-year, multi-billion dollar framework,” according to a press release.
“Specifically, Intel Foundry will produce an AI fabric chip for AWS on Intel 18A,” Intel CEO Pat Gelsinger said in the statement on Monday.
Intel, once the world’s largest chipmaker with firm control over PCs and Macs, has struggled to keep up with the wave of mobile computing and has been overtaken in market value by Qualcomm and Texas Instruments, both market leaders in mobile chips.
And of course there is Nvidia, which rode the wave of the ensuing AI boom and became one of the most valuable publicly traded companies in the world.
The partnership between Intel and AWS is part of the chipmaker’s attempt to catch up. The new deal, along with a $3 billion grant from the U.S. government to boost domestic chip production and make chips for the U.S. military, “demonstrate the continued progress we are making in building a world-class foundry business,” Intel’s statement said.
Intel continues to build factories in the US states of Arizona, Oregon, New Mexico and Ohio, but is pausing production in Germany and Poland for about two years.
Following the announcement, Intel shares rose 6 percent in after-hours trading.
Gelsinger also shared the company’s goal of saving $10 billion by 2025. Intel has changed its business model to try to become a global chipmaker that can compete with Taiwanese company TSMC.
The statement said the company is halfway to its goal of cutting 15,000 employees by the end of the year and will notify additional employees of the layoffs in mid-October. The company also plans to reduce its global real estate portfolio by about two-thirds by the end of 2024.
