An unexpected collaboration is underway between Intel and AMD, known for their fierce rivalry in the semiconductor market. According to sources close to the industry, the two tech giants are in talks to manufacture AMD’s chips at Intel Foundry facilities.

Intel could manufacture AMD’s processors!

This potential partnership confirms former Intel CEO Pat Gelsinger’s vision of “producing chips for all the world’s major technology companies, including arch-rival AMD.” If an agreement is reached, AMD could shift some of its production, currently carried out at TSMC, to Intel.

However, details such as how much of the production would be transferred to Intel or whether AMD would make a direct investment, similar to other agreements, have not yet been finalized. Sources indicate there’s also a possibility the talks won’t result in a deal. Intel shares gained approximately 7% following the news.

This collaboration offers strategic benefits for both companies. For Intel, acquiring AMD as a customer is a key step in its long-term pursuit of new Foundry customers. The company’s current CEO, Lip-Bu Tan, has previously expressed the risk of completely discontinuing 18A production technology if demand isn’t sufficient. This partnership plays a critical role in the future of Intel’s foundry business.

For AMD, collaborating with Intel provides a reliable backup manufacturing pipeline. While Intel’s Foundry technology isn’t generally considered as advanced as TSMC’s, it offers a critical alternative in a potential emergency.

Furthermore, the US presence at the Intel negotiation table aligns with current policies. The White House requires 50% of chips destined for the US to be manufactured domestically, and additional tariffs on these chips are likely to be imposed.