SoftBank has reportedly chosen TSMC over Intel to manufacture the AI processors for its ambitious Project Izanagi, aiming to challenge NVIDIA in the AI accelerator market. This move represents a significant setback for Intel, which had initially partnered with SoftBank on this venture. However, concerns about Intel’s ability to meet the demands for high-volume and fast-paced production led SoftBank to switch to TSMC.
The decision, first reported by the Financial Times, casts doubt on Intel’s future role in the project and raises questions about how SoftBank’s ownership of Arm Holdings will influence the development. Although TSMC has been selected as the manufacturing partner, the foundry is already operating at full capacity, making it unclear how it will accommodate this new demand. None of the companies—SoftBank, Intel, or TSMC – have publicly commented on the matter, indicating that the project might take time to fully materialize.
SoftBank’s goal is not just to develop AI chips but to build an entire ecosystem similar to NVIDIA’s, which includes chip design, data centers, and a software stack to rival CUDA. This is a bold and ambitious objective that will require substantial resources and time to achieve.
In July, SoftBank expanded its semiconductor portfolio by acquiring Graphcore, a British AI chip designer. Although the purchase price remains undisclosed, this acquisition aligns with SoftBank’s significant involvement in the semiconductor industry. The company already holds a majority stake in Arm, which it acquired for $32 billion in 2016. Despite Arm’s return to the public markets last year, SoftBank has maintained its controlling interest.
In a related development, Intel recently divested its position in Arm, selling 1.18 million shares and generating approximately $146.7 million from the sale.
