The Atom processor, the only bright spot on Intel’s balance sheet, will soon no longer be manufactured by Intel itself (CNet has more). Intel has signed an agreement with the Taiwan Semiconductor Manufacturing Company (TSMC), outsourcing the production of the successful chip to Taiwan. While it’s not the first time Intel outsources production of its silicon, it is still an unusual move for the company to outsource the production of such a major chip.
Under the agreement, Intel will ports its Atom processor to TSMC’s “technology platform, including processes, intellectual properties, libraries and design flows”. The aim of the agreement is to expand the availability of the Atom chip to mobile internet devices, smartphones, netbooks, and nettops. “We believe this effort will make it easier for customers with significant design expertise to take advantage of benefits of the Intel architecture in a manner that allows them to customise the implementation precisely to their needs,” Paul Otellini, Intel’s CEO, said.
According to Intel, the deal is not about capacity, but about “expanding mutual market influence into new growth opportunities”. TSMC will not actually market the processors as a TSMC product, but will merely manufacture them. Intel will remain in control over the processes and who to sell to.
“Intel gets a vast new market potential for Atom since TSMC has connections to many consumer and lower end PC-type products (e.g., MIDs, webtop devices, netbooks, media servers/set-top boxes, etc.), especially in the important Far East markets (Taiwan, Japan),” industry analyst Jack Gold told ZDNet. “TSMC gets to offer a high performance processor they did not have to design, but that they can customise for the clients who will take volume products. It also adds the ability to merge the work TSMC is doing on WiMax enabled devices and couple it with Atom processors.”
It’s pretty clear by now that Intel is basically going after ARM. ARM owns a lot of the mobile computing market, and is currently trying to expand into the netbook market. For Intel, it’s vice versa; it owns the netbook market, and wants to expand downwards into the more mobile segments of the market.
I don’t see anything special here.
Intel’s main market are still server, desktop processors and more powerfull mobile processors.
Outsourcing Atom means for them that they don’t have to build necessary fabs for a larger quantity themselves. If the netbook hype somewhat diminishes or they fail to get into smaller devices, they just don’t order anymore.
It may be that Netbooks are in the talks everywhere, but still Atom is not *that* an important processor to Intel. From the article refered to in the earlier story:
Intel recorded revenue of $8.2 billion
Atom […] pulled in $300 million in revenue
That’s 3.7%.
Edited 2009-03-02 20:56 UTC
haha you don’t see anything special? you are rebounding too hard against the article. there is a lot special about this whole situation.
Yeah I’m wondering about this, seriously. Everybody is talking about the netbook market, but really. It is some gadget some people want to have and can afford. A clever way of creating an entirely new market. But this market will be repleted very quickly.
And about even smaller devices: Intel still has a lot of work to do. Ok I understand the idea of packing atom into a SoC design. Current implications? It will take them quite some time for the first prototype..
bla bla bla core business bla bla bla cooperation.
It is all about the price. Taiwanese workers cost less and their margin is not high enough on the atom. Some guys in their suit said they want more billions.
Well, apart from a pair of monopolists attempting to flood the low power netbook market with windoze machines . . .
Still, it’s always easier to let others do the innovating then clean up later.
HTH.
Given that Intel is also doing Linux’s driver development, I think that it’s fair to say that what they want is to flood the embedded world with x86 not necessarily Windows..
Yes Intel has a monopoly on x86 CPU, but I don’t think that this agreement with TSMC is an abuse of their monopoly.
http://componentsforlaptop.com/news/2008/10/02/tsmc-bringing-28nm-c…
28nm atom’s. while intel and AMD will be at 32nm by then TSMC will be a little better off.
and:
“As part of the collaboration, Intel Atom CPU cores will be ported to the TSMC technology platform including processes, IP, libraries, and design flows. The result will have Intel Atom SoCs available for a wider range of applications. Intel says it will significantly broaden the market opportunities for the Atom SoCs and accelerate the deployment through multiple SoC implementations.”
You’re right, that’s the thing.
It is about creating custom SoCs around Intel CPUs.
It is about competing ARM CPUs with x86 architecture IPs.
TSMC is still working out the kinks out of their 40nm process. Intel has working 32nm *today*.
Intel will be in 22nm lad by the time TSMC has anything close to be working regarding their 28nm process.
By the time they get their 28nm ready (I haven’t heard of that node size). Unless their 28 nm is a half node revision of their 40nm process (TSMC has a history of doing 0.5 node increases rather than full node releases, i.e. their 55nm process is pretty much a tweaked 65nm process, like their 80nm was to the 90nm).