As reported, Intel, based here, will port unspecified Atom processor cores to Taiwan Semiconductor Manufacturing Co. Ltd.'s technology platform, including processes, IP, libraries and design flows under the terms of an agreement between the two companies announced Monday (March 2).
The deal goes beyond a simple foundry or intellectual-property (IP) deal, however. Besides attempting to lower the manufacturing cost structure for the Atom processor, Intel is attempting to reach more customers for the processor in four key markets: consumer, embedded, handheld and netbooks.
In addition to Intel, customers can now gain access to Atom and other IP at TSMC (Hsinchu, Taiwan) as a result of the deal with the foundry giant. With the TSMC deal, Intel also hopes to jumpstart the slumping electronics market with new IC design activity.
But it could also intensify a growing rivalry between the company and IP processor king ARM Holdings, said Doug Freedman, an analyst with Broadpoint.AmTech. ''This is aimed to get into ARM's markets for embedded,'' Freedman said.
ARM has a different model than Intel, which sells standard x86 processors. The U.K.-based firm licenses its IP to companies, but still, the rivalry is heating up. Recently, for example, Intel took the wraps off a new NetTV processor and an X86 set-top box processor. Intel is also vying with ARM for a dominate share of the Mobile Internet Device (MID) market with its new Atom CPU.
Not only does the new deal put Intel on a further collision course with ARM, but it also pits the Intel-TSMC duo against IBM Corp.'s ''fab club'' in the embedded space. In recent times, ARM has become cozy with IBM's technology alliance and announced a 32-nm processor core based on the process technology from Big Blue.
Over time, Intel hopes to shake up the entire embedded space, which is occupied by a plethora of chip vendors and architectures. Intel has been selling into the embedded market with x86-based processors for years, but it wants to expand those efforts with Atom.
To boost its efforts, Intel on Monday also rolled out four versions of its Atom mobile PC processor and two new companion I/O chips tailored for different embedded systems markets.
So far, Atom has done relatively well selling into ultra thin and light subnotebooks that Intel has dubbed netbooks. ''Intel has got no choice'' but to expand its efforts with Atom, Freedman said. ''The market (for PCs) is growing at the low end.''
This is both good and bad news for the chip giant. The Information Network (New Tripoli, Pa.), a research firm, said many consumers who purchased netbooks would likely have bought PC notebooks had the new product category not emerged. Assuming a price difference of at least $200 each between Atom processors and Intel's more expensive Penryn devices for notebooks, the firm estimates that Intel lost $1.14 billion in revenue in 2008 by making cheaper processors and stands to lose another $2.16 billion in 2009.
High-k or no k?
In a press event at Intel's headquarters here, Intel and TSMC outlined the deal, which, in turn, raised more questions than answers. For years, Intel has outsourced many commodity parts--such as chipsets and other products--on a foundry basis to TSMC.
But this is the first time Intel has outsourced a processor technology, which in itself is a ''teutonic'' shift, said G. Dan Hutcheson, chief executive of VLSI Research Inc. (Santa Clara, Calif.).
Intel has no plans to get out of the fab game and will remain an integrated device manufacturer (IDM), said Sean Maloney, executive vice president and chief sales and marketing officer at the company. The idea behind the deal with TSMC is to expand into new markets in a growing space, Maloney said. ''We want to go after embedded,'' he said at a press event.
Anand Chandrasekher, senior vice president and general manager of Intel's Ultra Mobility Group, insisted that the company will continue with its own Atom roadmap, designing new standalone Atom processors for a range of markets. As before, it will continue to make the Atom devices in its own fabs, he said.
Intel said it would transfer unspecified Atom IP to TSMC under the terms of a memorandum of understanding between the two companies. Intel said it would maintain control over which customers can access the Atom cores.
The Atom is based on Intel's 45-nm technology. It also includes Intel's prized high-k and metal-gate technologies. The Atom processor was built for low-cost netbooks and nettops.
The deal does not include manufacturing or process technology. That implies Intel has no plans to license or transfer its high-k process to TSMC.
Some believe that Intel will continue to develop and sell Atom processors based on high-k and metal gates. In contrast, TSMC will most likely offer Atom cores that have the same instruction set, but it is doubtful the devices will include high-k and metal gates.
So as a result, it's unclear--or perhaps unlikely--that the potential IP cores from TSMC will have the same performance levels as those from Intel, Broadpoint.AmTech's Freedman said.
On the other hand, there could be some major benefits for customers who go to TSMC for the Atom IP cores. TSMC has a large portfolio of proprietary and third-party IP, enabling customers to devise a wide range of system-on-a-chip (SOC) designs, he said.
Malcolm Penn, CEO and chairman of Future Horizons, added that Intel will be able to lower the cost for Atom in embedded applications by going with TSMC. ''Intel has shown the gutsy single-mindedness needed to win new chip markets and it has simultaneously not shirked the hard fact that its cost and marketing structure couldn't compete. It has powerfully raised the competitive stakes in the digital consumer electronics market,'' he added
On the other hand, Intel has previously fallen on its face in the arena. Several years ago, Intel made a bid for the network device, mobile phone and portable multimedia player markets with its StrongARM-derived PXA2xx and IXP4xx processor families.
Over time, Intel abandoned this effort and went back to the safety of the desktop. Will history repeat itself? Time will tell, but Intel needs new growth streams amid a tough, gloomy recession.
;){kind=link}