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Intel sets sights on a foundry goal for innovation

Posted: 14 May 2014 ?? ?Print Version ?Bookmark and Share

Keywords:Intel? foundry? PC?

EBN's Tam Harbert plots Intel's movement in an industry that has seen the PC market falter along with the rise of the smartphone and tablet market.

The PC market declined 8 per cent last year, according to IHS. In its first-quarter earnings report, released in April, Intel reported an 8 per cent drop in revenue from the fourth quarter of last year. Net income dropped 26 per cent.

Intel revenue

Source: Intel earnings report

Coincidence? I think not. Personal computers have been Intel's primary market for decades, and the company was late to recognise how much smartphones and tablets were eating the PC market's lunch. The company has said it would reduce its workforce by 5 per cent this year. Last month, it said it would close a Costa Rican facility, cutting 1,500 jobs. It also will delay the opening of its Fab 42 in Arizona.

The search for growth and revenue is one reason Intel has been raising the profile of its foundry business over the last year. It entered the foundry business in 2010, taking on a few small customers such as the programmable logic start-ups Achronix Semiconductor and Tabula. Intel CEO Paul Ortellini downplayed the moves at the time, saying, "We don't see ourselves as a general-purpose foundry."

However, last year, Intel signed Microsemi Corp., a $1 billion company that sells analogue and mixed-signal semiconductors, along with Altera, a $1.5 billion FPGA vendor. It also named a new CEO, Brian Krzanich, who came up through Intel's manufacturing organisation and is pushing the foundry business. "If we can utilise our silicon to provide the best computing, we'll do that," Krzanich said at his company's analyst day last fall. "People who can use our leading-edge technology and build computing capabilities that are better than anyone else's, those are good candidates for our foundry service."

In fact, Len Jelinek, senior director and chief analyst at IHS Electronics and Media, told us Krzanich started the eight-inch fab in Hudson, Massachusetts, where Intel has been doing small amounts of custom foundry work for a decade.

But analysts differ on whether Intel's goal is to target a specific chip manufacturing niche or go into full-scale competition with general foundries like TSMC. In fact, nearly all of Intel's customers so far have been in programmable logic, an area that doesn't directly compete with Intel processors.

It's hard to understand the big picture here, but it seems that the programmable logic business is meshing with the processor business. But whose processor business? The Intel foundry is using its most advanced technologya 14nm, FinFET transistor processto manufacture Altera's Stratix 10 chips, which include four ARM Cortex A53 processor cores. ARM is Intel's chief rival in the mobile chip market.


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