Intel Corp says it has formed a division to design and build semiconductors for other companies, as the biggest computer-chip maker tries to widen its offerings and bolster its services.
Customers give Intel an initial design or a concept, and the chipmaker handles the full design, manufacturing, testing and packaging, said Naveed Sherwani, co-manager of the unit.
Intel has suffered this year as sales and profit fall during an industrywide slump. Analysts expect the situation to worsen as terrorist attacks in the US hurt consumer spending. The new business, Intel Microelectronics Services, could help soften the impact, analysts said. A similar unit at International Business Machines Corp bolstered the computer maker's recent results.
"It is a big departure for them," said Nathan Brookwood, an analyst with market researcher Insight 64. "They're always looking for ways to expand their business and expand customer relations."
Intel won't use its own plants for the new business. The Santa Clara, California-based company will give the work to several partners that already offer so-called foundry services, including Taiwan Semiconductor Manufacturing Co (台灣積體電路公司) and chip packager Amkor Technology Inc.
Those partners don't have a lot of deep design background, so working with Intel will help them break into new accounts that need this kind of help, Brookwood said. For Intel, using Taiwan Semi and others brings the experience of building chips to other companies' specs.
Intel will compete against IBM and LSI Logic Corp in building application-specific integrated circuits, or ASICs. The custom chips are popular in communications gear, a market that Intel has targeted with some of its own products such as processors for networking devices and its line chips for wireless gizmos.
The market for communications ASICs will double by 2005 from the US$18.8 billion in revenue projected this year, Intel said, citing researcher Dataquest Inc.
"We're bringing our core competencies in design expertise and expert manufacturing expertise to customers outside, as well as providing a channel where you can get access to all the key industry capabilities," said Craig Peterson, the unit's co-manager.
The new outsourcing service could help boost sales of Intel's communications chips as the client chipmakers learn more about the basic parts Intel is offering, Brookwood said.
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