Source: Intel forms foundry unit

11/6/2010 6:53 AM EDT

Having opened up a huge lead in the foundry nanometer nodal shrinkage, Intel can now exert enormous leverage throughout semiconductor manufacturing. Will they offer their 22nm technology also to Altera, for instance, to transform their competitiviness against Xilinx who will be using ARM technology at 40 nm, say?

Intel can pick where they provide key advantages of speed, price, and even power consumption to companies collaborating with them to the detriment of competitors.

11/6/2010 7:27 AM EDT

I think it's about filling spare capacity and looking into possible new markets as their main market segment shrinks.

11/6/2010 9:11 AM EDT

For readers interest: About 2 years ago during an earnings Conference Call, Otellini was asked about running a foundry operation. He didn't reject the idea and mentioned various issues such as competitive, legal and whether they could offer services on their best node-1 basis. Also, in an SEC filing about a year ago, Cray mentions a "contract" with Intel for a certain unspecified "silicon" device.

11/6/2010 4:19 PM EDT

If I can put myself in Intel’s position, I will go with one company that is not that big but has a unique technology that may be prevailed in the future. That is much lighter weight on their tiny business area where they want to growth. ASIC and Processor business area are not profitable enough, but FPGA or PLD will be. Altera is already working with TSMC, if I remember right.

11/7/2010 2:05 AM EST

Well it seems this is a serious consideration now. But to succeed as TSMC-type foundry, you have to have the ability to have many different focus areas. Besides logic, also mixed signal, analog, embedded memory, high voltage, CMOS imaging, RF, BiCMOS, etc., across several generations (at least as old as 0.35 um). But Intel probably already sold off all or most of its pre-90 nm 200 mm equipment. Serious foundry planning probably would have prevented some fab closures. So it would mean Intel has at least several years catchup to TSMC. It would be interesting to watch the competition at high-end (sub-32 nm) though. Would Intel beat out Samsung and TSMC and GF in this key area? Would commmoditization of foundry services eventually happen?

11/7/2010 11:20 AM EST

Someone told me the Intel-Achronix Semiconductor deal revolves around the Atom processor. Intel needs a third-party to put Atom on the IP map. Comments on this?

11/7/2010 7:42 PM EST

Intel is probably fabbing devices for customers who have government contracts which require ASICs to be foundried in the US -- as long as the ICs don't compete with Intel business units. I am sure price is not the primary consideration for these customers. There really are no other alternatives. IBM is hard to deal with and slow, and TI doesn't offer foundry services below 65nm.

11/7/2010 9:25 PM EST

What's next @Mark LaPedus? Pics on the EE|Times homepage of half-alien-half-Holstein calves being raised in a warehouse somewhere outside of Round Rock, Texas... as reported by sources? :)

11/7/2010 11:52 PM EST

My opinion on the subject:

http://wp.me/psH60-25o

Out of the 5 possible outcomes I pick #6.

D.A.N.

11/8/2010 1:51 PM EST

Good one Warren. Any thoughts on Intel's foundry efforts?

11/8/2010 3:00 PM EST

The case for Intel foundary business was much stronger a decade ago when Intel fab process was a generation ahead of the competitors.

Recall that Intel had started a foundary business around 1999-2000. Then the scope included backend/physical design services. Strangely it did not restrict service to Intel fabs and offered to liason other foundaries too.

Entry to the foundary business is harder now. But so is the disperation of Intel to diversify in areas other than the core PC business.
Not too long ago Intel was going to use TSMC to enter SOC/embedded business.
I think Intel is throwing darts everywhere hoping to stick somewhere. Very bad strategy.

11/13/2010 11:05 PM EST

I've predicted foundry as part of Intel's five year plan for two years. Its early and don’t see it as a volume thing quite yet. Intel financial production strategy is based on exponential volumes over time. Obviously it takes product volume to reach capacity with ever finer process dimensions. Capacity in step with margin requirement and the depreciation schedule. FPGA to me means configurable and that means prototype and/or network communications. And oh boy would Nvidia and VIA love to sell raw die into an open cavity in an Intel package. My bet is that Intel is enabling certain design teams, probably a small number, with its process rules. And that their designs will end up as blocks in Intel SOCs. The key to becoming a design slave in this environment is what Intel does not have. Power management for one. And then remember to tell the Intel lawyer when asked what else the design is capable of, that the design is only capable of what Intel has specified. Watch out for your IP. Mike Bruzzone , Camp Marketing.

11/16/2010 12:49 PM EST

@dnenni: There is a good possibility that your pick #6 may end up becoming an expensive shot for Intel! I don't know if Intel has aligned the ecosystem partners (eg., OSATs) in this model or left it up to Achronix (& other likely businesses coming its way) to manage it. Achronix may find some cost advantages with other established foundries like TSMC (& even Global Foundries) who have partnerships in probing, packaging and final test vendors.

My previous experience as a wafer probing test hardware developer in the Intel ecosystem was not a pleasant one. I imagine Intel facing difficulties in signing up ecosystem partners for its foundry business model since many of them have been burned by it in the past.

MP Divakar