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Intel taps TSMC for low-power chip fabbing

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Intel and the Taiwan Semiconductor Manufacturing Company (TSMC) announced Monday that the two companies will work together to produce system-on-chip (SoC) silicon based on Intel's low-power Atom processor cores. The chips will be manufactured by TSMC, the world's largest dedicated semiconductor foundry.

The SoCs produced by this partnership, being based on the Atom core, could bring industry-standard x86 compatibility down into the extremely low-power world of handheld devices.

The agreement is a major shift in tactics for Intel - a company known for its advanced chip-fabrication technology and manufacturing expertise - as it is the first time the company has brought in a chip-foundry partner for such an important product set.

The announcement was made at a meeting with reporters at the company's Santa Clara, California headquarters, hosted by Anand Chandrasekher, senior vice president and general manager of the company's Ultra Mobility Group.

Chandrasekher emphasized that the partnership did not imply a modification of Intel's existing Atom roadmap. That roadmap will remain unchanged. The TSMC partnership won't be producing standalone Atom chips, but Atom-based SoCs that will be, as he put it, be "an enhancer" to Intel's existing Atom roadmap.

The SoCs will be targeted at four markets: embedded processors, consumer electronics, netbooks and nettops, and handhelds. Chandrasekher said that the agreement "will allow us to be able to get access to a market segment that we cannot do alone, and it also allows TSMC to be able to take advantage of our capabilities in advanced high-performance and low-power, and potentially to get access to new customers, as well.

"It's a win-win for both companies," he said. "It doesn't replace what we are doing already, and it doesn't replace what [TSMC] is doing already. It's additive to what we are currently doing."

Chandrasekher wouldn't talk about specific SoC capabilities or timelines, saying only that "product implementations are still being defined, but you can assume that it will be an advanced processor."

Sean Maloney, Intel's executive vice president and chief sales and marketing officer, added that despite the fact that no specific product announcements were being made, "Both companies have a sense of urgency."

Chandrasekher noted that the "critical path" in the technology transfer would be porting the Atom core from Intel's manufacturing process to that of TSMC. Maloney reminded assembled reporters, however, that the Intel-TSMC partnership goes back over a decade, and asked them to "bear in mind that we have had hundreds, or thousands, or more engineers working on TSMC processes for some time."

When asked if the partnership would involve transfer of Intel's manufacturing process technology to TSMC, Maloney had a quick and unequivocal answer: "No." This provoked smiles from TSMC's President and CEO Rick Tsai and his team, possibly indicating that such a transfer had been part of the negotiations.

Maloney explained that a major reason for the agreement was that TSMC has access to IP (intellectual property) licenses that Intel does not and which customers require. "This give us access to a different market, and allows our customers to do more-differentiated products," he said, "It opens up a new area for us."

Chandrasekher added that there are two reasons why Intel itself doesn't simply acquire the needed IP themselves: the time it would take to do so, and the "investment element."

When asked how this partnership compares with the many existing ARM-based SoC partnerships from various vendors such as Samsung, Maloney emphasized that Intel will maintain a great deal of control over which customers will have access to the Atom-based SoCs. "We will be picking the segments we go after," he said.

The chips developed and manufactured in the partnership will be sold to Intel customers. OEMs will negotiate with Intel, which will then work with TSMC to produce the SoCs, and Intel will sell and deliver them to the customers. Alternatively, Chandrasekher noted, a customer might approach TSMC, and TSMC would direct that customer to Intel.

In response to a questioner about the relevance of this announcement to Intel's future plans in the smartphone market, Chandrasekher reminded the questioner that the scope of the agreement is much broader than simply smartphones.

He did, however, point out that he believes Intel has specific strengths it might bring to the smartphone market: "Our advantages in the smartphone market are world-class performance and our ability to deliver compatibility, so all the software and applications ecosystem that is desired on these advanced phones and mobile computers, we run those today. What we have to work on now is to get our power down."

And although many questioners tried to squeeze product and delivery-date information out of the presenters, none were forthcoming. Maloney simply said "We're not going to sit on our hands," and Tsai added, "We're going to do it, and we're going to do it fast."

If, indeed, the two companies are able to quickly produce low-power x86 SoCs, the mobile market might be quickly headed for another merger - one of x86 computers and fully-qualified x86 handhelds. ®

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