Intel and AWS Expand Strategic Collaboration, Helping Advance U.S.-Based Chip Manufacturing

Rhea-AI Summary

Intel (INTC) and Amazon Web Services (AWS) have announced a multi-year, multi-billion-dollar collaboration to produce custom chip designs. Intel will manufacture an AI fabric chip on Intel 18A and a custom Xeon 6 chip on Intel 3 for AWS. This expansion of their longstanding partnership aims to accelerate U.S.-based chip manufacturing and create a vibrant AI ecosystem in Ohio.

The collaboration underscores both companies' commitment to domestic semiconductor production. Intel reaffirms its plans for leading-edge manufacturing in New Albany, while AWS plans to invest $7.8 billion to expand its data center operations in Central Ohio. This builds on AWS's existing $10.3 billion investment in Ohio since 2015.

The partnership is expected to drive innovation, support business growth, and contribute to a sustainable domestic AI supply chain. Both companies will explore potential for further designs on Intel's advanced process nodes, including those to be produced in Intel's Ohio facilities.

Positive

• Multi-year, multi-billion-dollar collaboration between Intel and AWS
• Intel to produce custom AI fabric chip on Intel 18A and custom Xeon 6 chip on Intel 3 for AWS
• Expansion of U.S.-based chip manufacturing and AI ecosystem in Ohio
• AWS plans $7.8 billion investment in Central Ohio data center operations
• Potential for further chip designs on Intel's advanced process nodes, including Ohio facilities

Negative

• None.

Insights

Financial Analyst

Intel and AWS's multi-billion-dollar collaboration marks a significant shift in the semiconductor industry. This deal could potentially boost Intel's revenue and help it regain market share in the competitive chip manufacturing space. The partnership's focus on AI-specific chips aligns with the growing demand for AI infrastructure, potentially positioning Intel as a key player in this high-growth market. For AWS, this collaboration ensures a stable supply of custom chips, important for maintaining its competitive edge in cloud services. The $7.8 billion investment by AWS in Ohio data centers further underscores the economic impact of this partnership. Investors should monitor how this collaboration affects Intel's financial performance and market position in the coming quarters.

Tech Expert

This collaboration signifies a strategic shift in chip manufacturing. Intel's commitment to produce custom AI fabric chips on its advanced 18A node for AWS is a technological milestone. It demonstrates Intel's capability to compete with TSMC in advanced node production, potentially disrupting the current semiconductor landscape. The focus on AI-specific chips aligns with the exponential growth in AI workloads. This partnership could accelerate the development of more efficient, tailored AI solutions, potentially leading to breakthroughs in AI performance and energy efficiency. The commitment to U.S.-based manufacturing also addresses geopolitical concerns around chip supply chains, potentially influencing future industry trends and government policies.

Market Research Analyst

This partnership could reshape the competitive dynamics in the cloud and semiconductor industries. For Intel, it provides a guaranteed high-volume customer for its advanced manufacturing processes, potentially attracting other major tech companies to its foundry services. This could challenge TSMC's dominance in the advanced chip manufacturing space. For AWS, custom-designed chips could offer a significant performance advantage over competitors, potentially increasing its market share in the fiercely competitive cloud services market. The focus on AI chips aligns with the projected 35% CAGR of the AI chip market through 2030. This collaboration also strengthens the U.S. position in the global semiconductor industry, potentially influencing geopolitical dynamics and reshoring trends in high-tech manufacturing.

Intel to Produce Custom AI Fabric Chip on Intel 18A and Custom Xeon 6 Chip on Intel 3 for AWS; Multi-Year, Multi-Billion-Dollar Collaboration Accelerates Development of Chip Manufacturing in Ohio

SANTA CLARA, Calif. & SEATTLE--(BUSINESS WIRE)-- Intel Corp. (INTC) and Amazon Web Services. Inc. (AWS), an Amazon.com company (NASDAQ: AMZN), today announced a co-investment in custom chip designs under a multi-year, multi-billion-dollar framework covering product and wafers from Intel. This is a significant expansion of the two companies’ longstanding strategic collaboration to help customers power virtually any workload and accelerate the performance of artificial intelligence (AI) applications.

Intel and AWS expand strategic collaboration. (Graphic: Business Wire)

As part of the expanded collaboration, Intel will produce an AI fabric chip for AWS on Intel 18A, the company’s most advanced process node. Intel will also produce a custom Xeon 6 chip on Intel 3, building on the existing partnership under which Intel produces Xeon Scalable processors for AWS.

“This expansion of our longtime relationship with AWS reflects the strength of our process technology and delivers differentiated solutions for customer workloads,” said Pat Gelsinger, Intel CEO. “Intel’s chip design and manufacturing capabilities, combined with the comprehensive and broadly adopted cloud, AI and machine learning services of AWS, will unleash innovation across our shared ecosystem and support the growth of both businesses, as well as a sustainable domestic AI supply chain.”

“At AWS, we're committed to delivering the most powerful and innovative cloud infrastructure to our customers,” said Matt Garman, CEO at AWS. “By co-developing next-generation AI fabric chips on Intel 18A, we continue our long-standing collaboration, dating back to 2006 when we launched the first Amazon EC2 instance featuring their chips. Our continued collaboration allows us to empower our joint customers with the ability to run any workload and unlock new AI capabilities.”

With this expanded collaboration, Intel and AWS underscore their commitments to accelerating U.S.-based semiconductor manufacturing and creating a vibrant AI ecosystem in Ohio. Intel continues to be committed to the New Albany area and its plans to build leading edge semiconductor manufacturing. AWS is planning to invest $7.8 billion to expand its data center operations in Central Ohio, in addition to the $10.3 billion it has invested in the state of Ohio since 2015.

“This collaboration between Intel and AWS is a great development for U.S.-based manufacturing and solidifying Ohio as a leader in AI,” said Ohio Governor Mike DeWine. “Today’s announcement furthers Intel’s commitment to U.S. manufacturing sites, like Ohio’s, as well as AWS’s commitment to its nearly decade-long investment in our state.”

AWS and Intel have a more than 18-year relationship dedicated to helping organizations of all sizes to develop, build, and deploy their mission critical workloads in the cloud, while also supporting them to reduce cost and complexity, increase security, accelerate business outcomes, and scale to meet their current and future computing requirements. Going forward, Intel and AWS also intend to explore the potential for further designs to be produced by Intel based on Intel 18A and future process nodes including Intel 18AP and Intel 14A, which is expected to be produced in Intel’s Ohio facilities, as well as the migration of existing Intel designs to these platforms.

Forward-Looking Statements

This communication contains certain forward-looking statements regarding Intel’s expectations regarding the co-investment framework between the parties, including statements regarding the benefits and the timing of the framework and impacts on their business and strategy. Words such as “expect,” “plan,” “intend” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements are based on management’s expectations as of the date they were first made and involve risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, the risk that transactions contemplated by the announced framework may not be completed in a timely manner or at all; inability to develop, manufacture or sell products successfully under the framework; expected benefits, including financial benefits, of the framework may not be realized; delays, disruptions, challenges or increased costs in Intel’s construction or manufacturing expansion of fabs, whether due to events within or outside of Intel’s control; the complexities and uncertainties in developing and implementing new semiconductor products and manufacturing process technologies; implementing new business strategies and investing in new businesses and technologies; litigation or disputes related to the framework or otherwise; unanticipated costs may be incurred; potential adverse reactions or changes to business relationships (including customers and suppliers) resulting from the announcement of the transaction; macroeconomic conditions, including the general economic conditions in the semiconductor industry; regulatory restrictions; impact of competitive products and pricing; international conflict and other risks and uncertainties described in Intel’s Form 10-K and other filings with the SEC.

Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in the documents Intel files from time to time with the SEC that disclose risks and uncertainties that may affect its business. Unless specifically indicated otherwise, the forward-looking statements in this report are based on Intel management expectations as of the date of this report, unless an earlier date is specified, including expectations based on third-party information and projections that management believes to be reputable. Intel does not undertake, and expressly disclaims any duty, to update such statements, whether as a result of new information, new developments, or otherwise, except to the extent that disclosure may be required by law.

About Intel

Intel (Nasdaq: INTC) is an industry leader, creating world-changing technology that enables global progress and enriches lives. Inspired by Moore’s Law, we continuously work to advance the design and manufacturing of semiconductors to help address our customers’ greatest challenges. By embedding intelligence in the cloud, network, edge and every kind of computing device, we unleash the potential of data to transform business and society for the better. To learn more about Intel’s innovations, go to newsroom.intel.com and intel.com.

© Intel Corporation. Intel, the Intel logo, and other Intel marks are trademarks of Intel Corporation or its subsidiaries. Other names and brands may be claimed as the property of others.

About Amazon Web Services

Since 2006, Amazon Web Services has been the world’s most comprehensive and broadly adopted cloud. AWS has been continually expanding its services to support virtually any workload, and it now has more than 240 fully featured services for compute, storage, databases, networking, analytics, machine learning and artificial intelligence (AI), Internet of Things (IoT), mobile, security, hybrid, media, and application development, deployment, and management from 108 Availability Zones within 34 geographic regions, with announced plans for 18 more Availability Zones and six more AWS Regions in Mexico, New Zealand, the Kingdom of Saudi Arabia, Taiwan, Thailand, and the AWS European Sovereign Cloud. Millions of customers—including the fastest-growing startups, largest enterprises, and leading government agencies—trust AWS to power their infrastructure, become more agile, and lower costs. To learn more about AWS, visit aws.amazon.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240916961718/en/

Kylie Altman

Intel Investor Relations

1-916-356-0320

kylie.altman@intel.com

Sophie Won

Intel Media Relations

1-408-653-0475

sophie.won@intel.com

Amazon Web Services PR

aws-pr@amazon.com

Source: Intel

FAQ

What is the new collaboration between Intel (INTC) and AWS?

Intel and AWS have announced a multi-year, multi-billion-dollar collaboration to produce custom chip designs, including an AI fabric chip on Intel 18A and a custom Xeon 6 chip on Intel 3 for AWS.

How will this collaboration affect Intel's (INTC) manufacturing in Ohio?

The collaboration reaffirms Intel's commitment to building leading-edge semiconductor manufacturing in the New Albany area of Ohio, potentially including production on future process nodes like Intel 14A.

What is AWS's investment plan in Ohio related to this collaboration with Intel (INTC)?

AWS plans to invest $7.8 billion to expand its data center operations in Central Ohio, in addition to the $10.3 billion it has already invested in the state since 2015.

What are the potential benefits of the Intel (INTC) and AWS collaboration?

The collaboration aims to accelerate U.S.-based chip manufacturing, create a vibrant AI ecosystem in Ohio, drive innovation, support business growth for both companies, and contribute to a sustainable domestic AI supply chain.