The phrase “Politics makes for strange bedfellows” has been around for ages, and we can now offer an amendment: chip shortages make for unlikely silicon fabrication relationships. Admittedly, it doesn’t roll off the tongue the same way.
The news of the unlikely partnership came after the company’s inventory call this week. Jensen took several questions from the press, and said Nvidia was considering using Intel’s Foundry Services, according to Tom’s Hardware. The main reason is because they need redundancy in their supply lines and Intel is already a partner of theirs. “Our strategy is to expand our supply base with diversity and redundancy at every single layer. At the chip layer, at the substrate layer, the system layer, at every single layer. We’ve diversified the number of nodes, we’ve diversified the number of foundries, and Intel is an excellent partner of ours[…]. They’re interested in us using their foundries, and we’re very interested in exploring it,” he said.
What’s notable about this statement is previously Intel and Nvidia didn’t exactly compete directly in each others’ core competency. That’s about to change though as Intel and Nvidia go head-to-head in the GPU arena. It’s also doubtful Nvidia would ever tap Intel for its core GPU business. It currently uses TSMC for its GPUs, just like AMD, which is notably ahead of Intel when it comes to advanced nodes. Jensen also said his company’s relationship with TSMC took years to cultivate, and it’s hard when both companies have hundreds of partners. “TSMC is a services company that dances with, what, 300 companies worldwide? Our own operations are quite an orchestra, and yet they dance with us. So the ability to dance with all of these operations teams and supply chains teams is not for the faint of heart, and TSMC does it just beautifully.”
This seems to indicate that for its core GPU business, TSMC is its preferred partner, for now. However, Nvidia is a sprawling company with many interests and advanced technologies. It’s going to need a lot of chips made in the coming years, spanning all aspects of its business. In the same investor call Nvidia shared what it sees are the “$1 Trillion opportunity” in front of it, and only 1/10th of that involved gaming. The rest were chips for automotive, the Ominiverse, and AI enterprise, and “chips and systems.” So it’s quite possible in the next five years Nvidia will cease to be known as a gaming company, if that hasn’t already happened.
All that said, it does not sound like any type of arrangement with Intel will be forthcoming for several years. This is due to the inherent complexity of just such a relationship. “Foundry discussions take a long time, and it’s not just about desire. We have to align technology, the business models have to be aligned, the capacity has to be aligned, the operations process and the nature of the two companies have to be aligned. It takes a fair amount of time and a lot of deep, deep discussion – we’re not buying milk here. ”