Intel’s contract manufacturing business struck a deal with Amazon’s cloud services, leading to an 8% jump of Intel Corp (NASDAQ: INTC) within hours after Pat Gelsinger, Intel’s CEO, announced that Amazon has decided to hire Intel Santa Clara for designs and manufacturing of custom artificial intelligence chips.
Despite its unfathomable earnings in Q2, Intel, previously hired to package for Amazon’s AWS cloud division, will undertake the 18A chip-making process, the most groundbreaking version available for external clients, to produce “artificial intelligence fabric chip” for AWS. In addition, Intel also anticipates more designs to be made for Amazon following its prospective 14A and 18AP processes.
Among the decisions made, Intel would be selling shares in Altera, a programmable chip business, as well postponing its chip factory construction in Germany and Poland, while the planned expansion in the US remains unscathed.
Gelsinger noted that Intel manufacturing business, also known as Intel foundry, has been propped up to run as an independent subsidiary that is critical to the company’s turnaround.
On that note, Intel was awarded roughly $3 billion in direct funding from the US Chips and Science Act on Monday, while layoffs of around 15,000 personnel can be expected this October.
