While that practice is common and continues today, there appears to be a new power broker -- or possibly breaker -- in the fab tool community: Intel Corp. The chip giant continues to fund technologies and procure fab-equipment, but behind the scenes, the company is investing in some companies and brokering deals for others, reportedly including ASM International NV (ASMI) and NuFlare Technology Inc., sources said.

In fact, Intel has invested in a multitude of tool and materials suppliers over the years, according to its Web site. This leaves some to wonder if Intel may end up bailing out many of its tool vendors--or the equipment sector as a whole--amid the terrible and ongoing downturn in the arena.

To be sure, Intel is quietly stepping up its procurement efforts in the fab tool arena, in a move to prop up select vendors and widen its lead over AMD, IBM and other processor rivals. In fact, Intel is expected to make its tool selections for the 22-nm node by the end of July and vendors are scrambling to win the prized business, sources said.

Some see Intel as the near savior for the equipment industry. Other observers view the company's initiatives as self serving--and potentially reckless for the industry--especially in 450-mm technology, ATE and lithography. And others also wonder if Intel's ongoing push to propel Moore's Law--or the two-year process cycle--will ultimately drive the fab tool industry into the ground. Many tool vendors simply can't keep up with Intel's costly requirements; they can't afford the soaring R&D.

So, is Intel the fab tool broker--or breaker? Intel refused to comment on its fab tool suppliers and reports about funding certain vendors. But like most chip makers, Intel is worried about the health of the fab tool industry.

''It's been a very bad year for the tool makers in general,'' said Mike Mayberry, vice president of the Technology and Manufacturing Group and director of components research at Intel. ''Obviously, Intel would like a healthy supply chain. Should Intel bail out everybody? Well, obviously we can't. There are too many players in the market for anybody to bail out.''

Asked if Intel's efforts to advance Moore's Law will ultimately bankrupt the IC industry, including the fab tool sector, Mayberry told EE Times: ''If you think the world is ending, then you do things differently. We don't think the world is ending, so we will keep pushing at something better than what we have today.''

In any case, Intel raised eyebrows in May, when it invested in one of its key--and struggling--fab tool vendors: ASMI. Intel also reportedly encouraged another one of its suppliers--Tokyo Electron Ltd. (TEL)--to invest in rival ASMI, sources said. ASMI provides two separate and critical tool technologies--high-k and low-k--for Intel.

Now, Intel is reportedly brokering deals for Japan's NuFlare, a supplier of reticle-writing electron-beam tools to Intel and others, sources said. The chip giant has approached Nikon Corp. about investing in NuFlare, which is also struggling, sources said. Intel declined to comment on its vendor relationships. Officials from NuFlare claimed it has good relationships with its respective banks and is unaware of Intel's intentions.

Needless to say, the current and horrific downturn is causing many fab-tool suppliers to struggle, and, in some cases, filing bankruptcy. Simply put, the crisis in the supply chain is forcing Intel to provide funding to some of its struggling vendors, such as ASMI.

''Actually, if you look at ASMI's financials, the Intel investment (in ASMI) was not a bail out,'' said Dean Freeman, an analyst with Gartner Inc. (Stamford, Conn.). ''ASMI has about six quarters of cash on hand, which is more than many semi-equipment companies have at this time. The 4.9 percent stake (in ASMI) gives Intel a strong voting right in who will run ASMI, and (will) protect the Intel investment in high-k and PECVD. Note TEL also took a 4.9 percent share, as TEL and ASMI have a joint license agreement for some CVD technology.''

What's next? Some wonder if Intel may be forced to bail out the reeling IC-equipment industry. Like most leading-edge chip makers, Intel cannot afford a weak semiconductor equipment supply chain.

''Intel to a certain extent is already bailing out the equipment industry,'' Freeman said. ''Intel is one of the few semi manufacturers actually purchasing equipment during the downturn, so the funding you are hearing about might actually be purchase orders being released to the equipment companies.''

Is Intel the new fab tool power broker? ''I think if Intel has a vendor that is in financial trouble, they will take a serious look at the long term viability of that vendor,'' he said. ''If the vendor is capable of standing alone, it is possible (that vendor) could see a bridge loan or investment. If the long term viability is not good, then you could see M&A suggestions--or Intel (will) choose a new vendor.''

On the other hand, Intel is selective about its investments. ''Any investment Intel makes would need to be financially sound; they will not throw money away,'' he added.

Risto Puhakka, president of semiconductor industry research firm VLSI Research Inc., looked at the issue from a slightly different view. ''Intel has a long history of making strategic investments into its supply chain,'' Puhakka said. ''These investments are strategic in nature and they are usually made into segments like lithography, mask writers or process diagnostics. These segments have very high R&D cost to revenue ratios, so Intel is helping to nurture technologies that it considers critical for its future.''

It is unlikely that Intel needs to rescue the fab tool community. ''The current income statements (from fab tool vendors) are of course depressing, but the balance sheets are very strong. So there is no need for Intel to bail out the equipment industry. Intel is already doing its share by maintaining a relatively healthy capex and buying equipment as we speak,'' he added.