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Analysis: Intel as foundry for Apple, Cisco

Posted: 05 Dec 2012 ?? ?Print Version ?Bookmark and Share

Keywords:microprocessor? FinFETs?

Rick Merritt of EE Times makes a case on how Intel should consider turning things around for the company, possibly to focus less on microprocessor design and more into foundry services, to stay ahead of the game.

One option is to strategically pivot. For years, Intel has led with an identity as a microprocessor designer that has great chip-making capabilities. Maybe it's time to lead with its left foot. Intel could be one heck of a foundry that happens to have its own line of very successful products.

Face it, the market has shifted from the desktops Intel dominates to tablets and smartphones where it barely participates. But world-class semiconductor manufacturing is as valuable as ever, even as Moore's Law slows.

Here, Intel is still tops. It was First with high-k metal gate transistors, first with FinFETs. It has tons of capacity in leading-edge fabs all over the world. There's little doubt it will be first to field the extreme ultraviolet lithography that is key to next-generation processes.

I'm not saying Intel should pull the plug on processors. It has a huge position with the x86 today and is doing a reasonable job playing catch up in the new game of SoCs. This is just a re-balancing. The corporate weight shifts from the front to the back foot.

I'm not alone in thinking this way. Jim Turley of Silicon Insidersees Intel's x86 on a slow decline along with the PC market and says it's time for a change. "Intel needs a piece of good news, something that shows they have caught on to next-generation products, not hoping PCs will make a comeback," Turley said.

The shift may already be in the works. Intel has been making chips for a handful of mainly small FPGA companies for a couple years.

"I think they used those deals as training wheels, a trial run for a couple years before they would consider taking on some big customers," Turley said,

Next Intel CEO
My colleague Peter Clarke has been hearing rumours Intel will make high-end router chips for Cisco. Turley is hearing rumours Intel might make Apple's A series mobile applications processors.

Both deals make sense. The Cisco and Apple chips are strictly for internal use only, so there's no competitive threat for Intel. To the contrary, both Apple and Cisco have the potential to be much larger customers of Intel than they are today, potential a foundry relationship could nurture.

Such a shift requires a new kind of thinking about who Intel really is. Interesting then that the company abruptly announced its chief executive, Paul Otellini, will retire a year earlier than expected and that it will not name a replacement until May.

Turley speculates the Intel board may have given Otellini the boot in a meeting where they were at odds over Intel's strategy. I suspect it went a bit differently, and the announcement was intended to let the world know the top spot at the world's biggest semiconductor company is open in hopes of shaking some unsuspected candidates out of the woodwork.

I think Intel needs an outsider to reformulate its identity. It's a tricky task, a sort of tightrope walk. It requires big changes in how Intel is seen both internally and externally. It takes creativity.

As I have stated before, I think Intel needs its equivalent of Lou Gerstner, the RJ Reynolds exec who led IBM from being a lumbering computer maker to a successful services giant.

What's the future for the world's largest semiconductor company? Yes, that's a question that ought to call to some brilliant and ambitious mind hungry for a business challenge of historic proportions.

- Rick Merritt
??EE Times

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