Like most Silicon Valley chip design specialist, Altera (altr) have long embraced reliable formula: semiconductor design house, made in Asia. For the company's San Jose (California)-based, which sells telephone equipment processor, which means outsourcing production to Taiwan Semiconductor Manufacturing Co.. (TSM), current crop chipmaking save customers $ 4 billion or more to the cost of building their own. TSMC is the industry leader in contract manufacturing 39300000000 USD to chip called foundry business, took nearly $ 7 as of February sold.In end smartphone, though, Altera announced that taking advanced orders chip Intel (INTC), which has traditionally focused on making its own microprocessor instead of making another company. With PC sales in the doldrums, the world's largest chip maker needs to find new uses for surplus production capacity. Win business from Altera "is a big confidence boost for our team," said Sunit Rikhi, vice president of Intel pays business.Intel casting company also has to register as a small designer clients such as Tabula and Achronix Semiconductor. And it will make chips for Cisco Systems (CSCO), said two people with knowledge of the matter who was not authorized to discuss publicly. They won as Intel and TSMC foundry warm-up against the other for a much larger prize: Apple (AAPL). IPhone maker last year spent $ 3900000000 on custom chips from Samsung Electronics, according to data from IC Insights, and wanted to diversify to avoid chip that enrich archrival, said Steven Pelayo, an analyst with HSBC (HBC) in Hong Kong. Amount paid Apple Samsung to develop custom chips. It is likely that at least some other businesses to avoid enriching rivalTSMC early end smartphones as it leads to making chips in Apple's advanced technology needs, especially for mobile devices, said Javier. He estimated that nearly one-third spoon TSMC Chip Apple orders by percent by the end of the year and 50 thereafter. Intel will have a better shot in the next generation chip, which is about half the size. For Samsung, the No. 3 Foundry and the world's largest maker of smartphones is trying to expand its list of customers in the event of a decrease in orders from Apple. Business phone, making it one of the biggest buyers of parts, provide leverage in securing orders from foundry chipmakers, said Javier. "The less I scratch your back, you scratch mine." With heated competition between chip manufacturers, it is not clear how many others can grab the new Intel customers. Many major semiconductor designers compete with TSMC does not compete with Intel on the design of the contract, and that limits the field for Santa Clara (California)-based chip. "I do not expect NVIDIA (NVDA) or Qualcomm (QCOM) or Broadcom for (BRCM) look for opportunities to get into bed with Intel," said Steve Myers, an analyst in Tokyo at Ji Asia. "Most of the customer base is not necessarily interested in TSMC Intel." Intel Potential customers will also need assurances about long-term commitment to the U.S. chip maker to establish business. TSMC has a long track record of serving customers Outsourcing. Intel does not. When it comes to moving core microprocessor business, Intel has "tried many times and it's safe to say not as successful," said Anand Srinivasan, an analyst at Bloomberg Industries. The company has spent billions of dollars over more than a decade trying to get the processors in mobile phones. It ended 2012 with less than 1 percent of the market, which is dominated by Qualcomm. Intel Rikhi admits there is still a way to go to win the majority of foundry customers. Altera contract "is just a signature on a piece of paper," he said. "We need to convert silicon leadership." Bottom line: With a sluggish PC core business, Intel is trying to make a huge chunk of a $ 39300000000 chip-production.
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