SAN JOSE, Calif. - At present, Samsung Electronics Co. Ltd. is making the Apple-designed A4 and A5 processors on a foundry basis for Apple Inc.
That could soon change. As reported, Apple and Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) have entered into a foundry relationship for the A5 and follow-on chips, sources said.
Now, according to an analyst, another player is pursuing Apple's foundry business: Intel Corp. Intel is already supplying x86-based processors for Apple's PC line. Intel is also dabbling in the foundry business and hasrecently struck a dealwith Achronix Semiconductor Corp.
''Based on a number of inputs, we believe Intel is also vying for Apple's foundry business,'' said Gus Richard, an analyst with Piper Jaffray & Co., in a new report.
''It makes strategic sense for both companies. The combination of Apple's growing demand and market share in smart phones and tablets gives Intel a position in these markets and drives the logic volume Intel needs to stay ahead in manufacturing,'' Richard said.
''Intel's manufacturing lead gives Apple an additional competitive advantage in these markets and distances it from Asian competitors that are knocking off its products,'' he said. ''Furthermore, it would also serve to weaken Samsung who is a significant competitive threat to both companies.''
Samsung will remain Apple's main foundry-at least for now. ''While it will take a few years for Apple to shift foundry suppliers, we believe Apple is shifting away from Samsung,'' he said. ''We believe TSMC will start getting revenue from Apple in Q4 of this year. We believe the recent patent lawsuit between the two companies is further evidence to support our belief that Apple is moving its silicon needs elsewhere.''
Samsung and TSMC each have the fab capacity to support Apple. The question is clear: Does Intel have the capacity?
''Samsung has just completed a 30K-40K wafer start per month logic plant in Austin Texas to support its foundry business of which Apple is its largest customer,'' he said. ''Based on the die size of Apple's A5 processor, Apple needs roughly 23K wafers a month for the A5. We
believe that Apple moving its foundry business away from Samsung is what has recently driven Samsung to reduce equipment orders, as it will likely repurpose this capacity for memory.''
Food for thought: Intel once made one of the fastest ARM chips ever, the StrongArm (later called XScale), before selling it off to Marvell.
One of the architects of that chip? Dan Dobberpuhl, who later started PA Semiconductor, which was afterwards bought by Apple.
So many of Apple's ARM team were once designing ARM chips for Intel.
@hm: it may be too premature to declare the "success" of Thunderbolt high speed interconnect. Apple has had a history of going it alone throughout its corporate history; the only differentiators this time are the much higher volume consumer devices (as opposed to desktops of the past where Apple received a drubbing!). Apple also makes it easier for others to fill in the gaps it doesn't serve (read: flash-capable devices, for one!).
I don't believe Intel is going after Apple's foundry business entirely for revenue reason (there are TSMC's, UMC's of the world for lower costs for that). I think Intel sees an opportunity for technology collaborations for its next generation of Silicon.
Dr. MP Divakar
Apple is moving in the direction of rivalary with an old friend. I think it's the inner fear of Android and also the fact that Smamsung keeps it's profit margins lower and thus can outperform Apple any time!!!
This gives too much to Intel, in return for what exactly? I am not sure Apple should go down this road. They should stick with the well-known and trusted pure foundries. Granted the tie-up with Samsung is problematic but a tie-up with Intel would open up more and bigger problems in the future.
Once again, EE Times readers have offered a lot of valuable opinion and reasonable speculation. Let me just add a couple points briefly even if they have been alluded to previously. Moving to Intel as a foundry does not mean moving from ARM to X86. It could be further down the road and be something proprietary developed (or acquired) by Apple. Also, Intel has lots of motivation to take on Apple business, not least of which might be staving off a surging Samsung who have long set their sights on being the world #1 semiconductor company.
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