The deal reflects Intel’s desire to return to the top of chipmaking

The contract between the tech companies is that Intel will make custom chips for computers designed by Microsoft and for Microsoft, The Verge reports.

The partnership between Intel and Microsoft was announced during the Intel Foundry event. Intel estimates the value of the deal at over $15 billion dollar.

There is no information from the two corporations on exactly what the chips will be used for. Microsoft will use them for internal designs in both processors and AI smoke detectors, writes Bloomberg.

“We are in the midst of a very exciting platform shift that will fundamentally transform productivity for every individual organization and the entire industry,” stated Microsoft CEO Satya Nadella in the official press release.

The chips will use Intel’s 18A process, which has been an indispensable part of the company since the return of Intel CEO – Pat Gelsinger.

The corporation believes that through the production of chips, they will once again rank among the leaders in the technology industry. In this venture, Microsoft will be their first major customer as well as a partner.

Producing designs for other companies is a strategy that has worked well for Intel’s competitor Taiwan Semiconductor Manufacturing Company (TSMC). It has created profitable partnerships with corporations such as: Apple, Qualcomm and AMD.

Pat Gelsinger announced that the foundry model for microelectronics manufacturing is a big part of Intel’s strategy. The new plans to manufacture chips using the foundry business model come at a time when technology companies are trying to make their own chips but are facing many challenges.

Intel Corporation has postponed the opening of a $20 billion chip plant to 2026. The original plans were for it to be opened in 2025. As the reason for the cancellation of the opening of the plant, Intel points to insufficient demand in the chip market and the delay in funding from the state.