US chip giant Intel Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) will work together to develop Atom chips — used in low-cost laptops — for more electronic devices to expand into new markets, the companies said in a joint statement yesterday.
Intel and TSMC signed a memorandum of understanding to collaborate on addressing technology platforms, intellectual property (IP) infrastructure and System-on-Chip (SoC) solutions, the statement said.
The collaboration is intended to expand Intel’s Atom SoCs availability for Intel customers to a wider range of applications through integration with TSMC’s diverse IP infrastructure, it said.
“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 customize the implementation precisely to their needs,” Intel president and CEO Paul Otellini said in the statement.
Products manufactured through the agreement could find adoption in embedded CPU market segments such as mobile Internet devices, smartphones, netbooks, nettops and AC-powered consumer electronic devices, the chipmakers said.
“The collaboration will help us broaden TSMC’s already rich product portfolio as we did not have any exposure in this area — Intel Architecture’s market segment,” TSMC spokesman Tzeng Jin-hao (曾晉皓) said by telephone.
Based on the MOU, TSMC will make Atom system-on-chips (SoC) for Intel, according to Tzeng.
As the deal is not, as many industry analysts had predicted, a manufacturing outsourcing deal for Intel, “we see this as long-term positioning for TSMC to expand processes and IP portfolio by offering Atom cores for foundry customers in all kinds of Internet mobile devices,” Citigroup analyst Andrew Lu (陸行之) said in a note to clients yesterday.
Eric Chen (陳慧明), a semiconductor analyst at BNP Paribas Securities’ Taiwan branch, said the deal would not have a significant impact on TSMC this year and next year as no manufacturing orders were expected from Intel.
For TSMC, revenue from cooperation with Intel could represent between 3 percent and 5 percent of the total for this year and next year, he said.
Chen said the deal could pave the way for TSMC to make Atom chips for Intel at some point in future as the US chip maker would have to fend-off growing competition primarily from the Nokia Ojy-Qualcomm Inc camp.
Nokia is expected to use Qualcomm snapdragon processors in the mobile phone maker’s first netbooks.
Shares of TSMC dropped 0.34 percent to NT$44.60 yesterday, underperforming the benchmark TAIEX index, which rose 0.21 percent.
Local rival United Microelectronics Corp (聯電) inched up 0.64 percent to NT$7.85.
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