SAN JOSE, Calif. – As reported, Intel Corp. this week took a step into the foundry business. Intel will lend its semiconductor process technology muscle to build FPGAs for programmable logic startup Achronix Semiconductor Corp. at 22-nm and beyond under the terms of a strategic agreement between the two companies announced Monday (Nov. 1).
Executives from Achronix (San Jose, Calif.) said the deal would not only help the company bring 22-nm FPGAs to market faster than programmable logic market leaders Xilinx Inc. and Altera Corp., but also give the startup a leg up in 15-nm and future technology nodes.
For years, Intel has dabbled in the foundry and ASIC markets. But the chip giant exited the ASIC business some years ago and has never been thought as a foundry player.
Now, there are signs that Intel is interested in the foundry business. It has reportedly hired a vice president in charge of foundry. Companies are approaching Intel about access to its fabs. Perhaps Achronix is a guinea pig and the start of something big. Rumors are running rampant that FPGA startup SiliconBlue has approached Intel.
The question is will Intel become a foundry player or not? Will it challenge GlobalFoundries, Samsung, TSMC, UMC and others? Or will it just dabble in the arena?
Here’s some opinions from around the industry:
Peter Clarke, European news director at EE Times, said: "I think Intel will get involved in the foundry market. I think the days of the self-sufficient IDM are over. If you are a chip maker, you need volume—and there are plenty of fabless companies out there who will buy a piece of your manufacturing output. We see that Samsung has thrown its hat in the ring, and now Intel is dipping its toe. Intel of course will never be a pure-play foundry like TSMC, but it will be a chip maker that does foundry work like IBM, Samsung and others. TSMC will remain the leading pure-play foundry, but Intel can throw a wrench in the works by doing leading-edge processes for companies it see as strategic partners."
Dean Freeman, an analyst with Gartner Inc., said: ''Will Intel become a big foundry player? On the wireless or (FPGA) side, they have the potential of being a foundry player. Does Intel have the capital and manufacturing to be in the foundry business? Yes. But the question is can they compete at the same cost as TSMC, UMC and GlobalFoundries.’’
G. Dan Hutcheson, chief executive and chairman of VLSI Research Inc., said: ''Given the fact that Intel did not formally announce an entry into to foundry business, but instead disclosed as an arrangement with a fabless company, indicates that Intel is testing the waters, not plunging into them. Not formally announcing an entry into the foundry business means they can easily retreat if it doesn’t work. Intel is not a company that burns the ships when it arrives in a new world. So the risk is low and they will learn a lot. At the same time, releasing their 22-nm process to an outsider means Intel is very serious about winning – more serious than they have ever been. Does it make sense? The short answer is yes. Growth outside a core market is best done by utilizing core strengths. For Intel, this is processors and process. There is no reason to constrain themselves to PC processors. But this means they must move towards embedded processors. Pushing them in this direction is the fact that systems in embedded designs continue to look more like PCs, while applications for classical PCs are not outgrowing the market. Processors are integrating more, rather than just getting bigger, making them look more like an embedded device going forward.''
Mark LaPedus, semiconductor editor of EE Times, said: ''Clearly, Intel won’t fab parts for its competitors, such as AMD, Broadcom, Nvidia, Qualcomm and others. But there are some startups or non-competitive companies that may be interested in doing business at Intel, especially in baseband processors and FPGAs-and for good reason. The foundries, namely TSMC, fumbled the ball at the 40-nm node and struggled with the process. Wait until we get to the 28-nm node and beyond. I hear the foundries are struggling to ramp with good yields. And despite the denials, I hear the foundries are struggling with their high-k/metal-gate technologies. Intel has successfully put two generations of high-k in production. Here’s one prediction: If the foundries fail to deliver high-k in time, watch out! Look for Altera, Xilinx and others to call on Intel. But there is more to the foundry business than just churning out parts. There is a service and IP mind-set. It’s really a service business, which is a whole new mind-set. Intel’s focus is processors. Beyond processors, the chip giant has never really found much success. We see that Intel is re-entering the wireless chip space with the acquisition of Infineon’s wireless business. I see Intel flopping in wireless again. I see Intel making a strong push in the foundry business. I see modest success for them. But TSMC CEO Morris Chang must keep a close eye on GlobalFoundries, Samsung, and now Intel.''
Dylan McGrath, editor of EETimes.com, said: "I don't believe Intel has the willingness, desire or intention to become a significant foundry player. Intel's manufacturing technology is the envy at all, but it is dedicated to Intel. The company has the capacity it needs to build parts for its business, and it's not going to sacrifice its position there to dedicate its lines to other companies. Intel may be dabbling in foundry work, but in the face of a sharp upturn in business, foundry customers (including Achronix) will see their orders take a back seat to demand for Intel products, just as we have seen with other IDMs who dabbled in foundry in the past. This deal may be partly about Intel trying its hand in foundry and experimenting with the possibilities, but in my view it has more to do with getting its feet wet with programmable logic technology—specifically Achronix' asynchronous logic technology."
Bryan Lewis, an analyst with Gartner, said the foundry alliance between Intel and Achronix ''surprised me. Intel wants to experiment with FPGA products in the fab.’’
Rob Lineback, an analyst with IC Insights, said: ''My main thought is that returns on investment in the foundry business are no where close enough to Intel's profit margins to make much sense for the company to be pursuing contract wafer manufacturing. Other IDMs are involved in foundry manufacturing, partly to fill wafer fabs, but that shouldn't be an issue at Intel. The only thing that makes sense is that Intel would have something else at stake, such as wanting to gain access to technology or an investment in the company it's producing products for."
Rick Merritt, editor-at-large for EE Times, said: ''This will be a big question for the company to wrestle with. On one hand, it has a very independent culture and an entrenched ‘copy exact’ methodology and little experience in chip-level customers. On the other hand, it is the single largest owner of fabs in an increasingly fabless and fab lite industry. And it has a long history of willingness to try new things. This would seem to set the stage for a great internal conflict within the soul of an industry bellwether.’’
Gus Richard, an analyst with Piper Jaffray & Co., said: ''We believe over the next couple of years a critical shortage of chips is going to develop. We are becoming increasingly aware of technology hurtles in leading edge logic, DRAM, and flash that will limit supply growth. We see evidence of OEMs striking long-term partnerships with chip makers and companies are approaching Intel for foundry services, not the other way around.’’