Jen-Hsun Huang, Nvidia's CEO, is a canny and intelligent leader who has capably helmed the company through both rough patches and successes, not least of which is the recently launched GTX 680
. He's known for strong opinions, but not crazy, off-the-wall statements, which is why his recent remarks regarding Intel are so surprising. Speaking to a group of analysts last week, Jen-Hsun casually suggested that Intel, one of Nvidia's chief rivals and competitors, ought to open up its foundries and manufacture hardware for the ARM SoC ecosystem.
"Why not be a foundry for all the mobile companies?" Huang said. “There’s no shame in that."
No shame -- but an awful lot of crazy. Intel has made headlines in the past 18 months for its announcements that it would fab parts for a handful of small vendors, but the companies in question -- Achronix and Tabula -- build FPGAs (Field Programmable Gate Arrays) that don't compete with any of Intel's core products. Intel's record profits and the relatively small volume of chips its building for third parties is evidence that the company doesn't need the money; it's more likely to be fabbing hardware for companies it feels might have interesting/useful IP that might be worth licensing or outright acquisition.
NV and Intel don't exactly have a history of cordiality and puppy swapping
Building parts for the likes of Qualcomm, Samsung, and Nvidia would mean building parts for its direct competitors. Given Intel's enormous aspirations for the smartphone / tablet industry, it makes absolutely zero sense for the company to even consider such an offer. Intel spokesperson John Carvill affirmed this viewpoint to Forbes. "We have a small nascent foundry business, but our focus with our SOCs (systems on a chip) is really on Intel based platforms," Carvill said. “Our process technology is a huge advantage going forward in 2012 and 2013, so our focus at this time is on building Intel products, not on building products for our competitors."
Huang claims Intel's margins are a problem for the company in the tablet/smartphone sphere, even as he clamored for access to the manufacturing technology the company's margins have made possible. “It’s a business model problem, it’s not a performance problems," Huang says. “We are willing to build the most amazing chip in the world and sell it for $40, that is the bottom of Intel’s range."
The margin issue has come up before in discussions of whether or not Intel's Atom smartphone
SoC, codenamed Medfield
, can truly compete with ARM. Company representatives, speaking off the record, have indicated that while Intel intends to build parts that enable it to drive strong margins, the company is very much aware of ARM SoC price trends. Intel has poured billions of dollars into Atom development and scaling since the chip design debuted in 2008; the company is scarcely going to sabotage those efforts by pricing its SoCs higher than the market will bear.
It's technically possible that Intel might one day agree to build parts for ARM SoC companies, but it'll never happen while the company is in an underdog position fighting for market share against more established opponents. Jen-Hsun, who has years of experience in the industry as well as a fractious history with Santa Clara, knows that better than anyone. His comments only make sense if they were meant to put pressure on TSMC, NV's long-time foundry partner -- but they're outlandish enough that we doubt anyone at the Taiwanese foundry was exactly taken in.