MediaTek to Develop Arm Server Chips with TSMC 3nm

MediaTek is set to develop cutting-edge server processors based on Arm's CPU and GPU IP, utilizing TSMC's advanced 3nm process. According to the Economic Daily, MediaTek aims to commence mass production in the latter half of 2025, targeting major cloud service providers (CSPs).

As the AI server market experiences rapid growth, high-end servers predominantly feature Intel and AMD's x86 architecture CPUs and NVIDIA's AI accelerators. However, these high-power chips are not always necessary, particularly in areas that do not demand extensive AI computation. This has led to a rising demand for low-power server CPUs in the mid-to-low-end AI server market. Companies like Qualcomm and MediaTek are actively developing Arm-based low-power server CPUs to meet this demand.

MediaTek has announced its participation in Arm's Total Design platform, planning to leverage the Arm Neoverse Compute Subsystem (CSS) for developing cloud computing chips. This initiative has already attracted significant IC design firms such as Novatek and Realtek.

Recent reports suggest that MediaTek's Arm-based server processors are expected to complete the tape-out process in the first half of 2025, using TSMC's 3nm process. The company is targeting leading CSPs including Microsoft, Google, and Meta, positioning server business as a new strategic focus. Initial shipments are anticipated in the second half of 2025, with full-scale production potentially beginning in 2026.

MediaTek has already integrated into the AI server supply chain with its Serdes chips. This positions MediaTek well to enter the high-end AI server market alongside NVIDIA chips or to capture a significant share of the mid-to-low-end AI server market.

Industry analysts note that MediaTek CEO Rick Tsai, in his keynote speech at COMPUTEX 2024, highlighted the potential for future collaborations with Arm by inviting Arm CEO Rene Haas to the event.

Currently, Intel dominates the server processor market with over 70% share, followed by AMD at around 20%. As the market for Arm-based computing grows, MediaTek has the potential to secure an initial 5% share of the server processor market, driving new growth for the company.