Intel May Be Gunning For Apple's Manufacturing Needs

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News Posted: Tue, May 3 2011 3:24 PM
It's only been two weeks since Apple and Samsung jointly sued each other for alleged patent infringement, but relations between the two companies have apparently already turned ice cold. Rumors in April suggested that Apple was discussing an arrangement with TSMC (there's been no official confirmation on either side). Gus Richard, an analyst at Piper Jaffray has since proposed that Intel itself may want a piece of this particular pie.

It makes strategic sense for both companies. The combination of Apple's growing demand and market share in smart phones and tablets gives Intel a position in these markets and drives the logic volume Intel needs to stay ahead in manufacturing. Intel's manufacturing lead gives Apple an additional competitive advantage in these markets and distances it from Asian competitors...it would also serve to weaken Samsung, who is a significant competitive threat to both companies.

Richards goes on to note that he expects TSMC to report revenue from Apple-related sales by Q4. Given the time it takes to forge an agreement and port a chip design from one foundry to another, it seems unlikely that Intel would do much manufacturing where the A5 is concerned. Intel, thus far, has only agreed to serve as a foundry for a single, relatively small, company (Achronix); it's made no move to court the larger design firms that companies like TSMC or GlobalFoundries depend on.


Apple's A5, currently manufactured by Samsung

Intel may not be willing to make room for Apple's needs. In order to take advantage of the leading technology Richards refers to, Apple would need to build chips on either Intel's 32nm process or the 22nm technology it's currently working on. Ironically, these are the two production lines Intel is probably least interested in licensing (assuming high volume production). Whatever foundry work Intel does for anyone, it serves its own interests first.  A company like TSMC, in contrast, is happy to build parts for two die-hard competitors—it handles both AMD and Nvidia production without a wink.  

Apple's decision to use custom-designed ARM processors could also raise a few hackles at Intel. Santa Clara has invested huge amounts of money into developing and scaling Atom into smaller devices; company executives might not be keen on manufacturing what amounts to a competitive product. Ultimately, Intel's decision would depend on how seriously it is about product manufacturing for other companies. Apple's manufacturing needs are significant enough that Intel would likely want agreements in place ensuring that Apple would use certain Intel products (think wireless radios) for the duration of the agreement.  

For now, Samsung will remain as Apple's sole supplier, regardless their respective lawsuits.
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coolice replied on Tue, May 3 2011 10:46 PM

Hmm.... why does it feel like Apples playing the wolf game....,

apple to samsung, "we gonna sue you"

apple to intel, "hey hey.... whats up?"

intel looks around and thinks..... Hmmmm?

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rapid1 replied on Tue, May 3 2011 11:01 PM

I did not think Intel could make ARM processors? I guess they could put some Atoms in an Apple device, but it would drop that battery life, which is really becoming the major positive of getting an Apple device. It is at least the only one I see personally. I mean yeah a 3 year old could probably operate one to, but anyone with the cash to buy one for themselves battery life will be a consideration for a mobile/semi mobile device (smart phone/ tablet-slate). I heard Atoms like to eat batteries in 3-4 hours at best at least with continuous use..

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jonation replied on Wed, May 4 2011 12:51 AM

"Apple would need to build chips on either Intel's 32nm process or the 22nm technology it's currently working on."

They'd have to re-engineer the chip. Maybe even using some of that stuff from the dark silicon article.

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If Intel has spare plant capacity to handle at least 32nm node production or re-tool at existing older plant to do so, it might just work. I personally think GF might be a better bet unless there is a solid fight for price, if Intel really wants it. They will probably get it.

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Joel H replied on Wed, May 4 2011 11:43 AM

All of the pure play foundries would like Apple's business-that's a given. Intel is unusual (if the rumor is true) because it isn't a pure play.

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I don't see Intel biting on this. They would have to take away production from lines they are using for their own products.

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InfinityzeN1:
I don't see Intel biting on this

The new iMacs that were just released have the Z68 chipset in them. Nobody else does at this point. Also, the new high-speed Thunderbolt port, developed by both Intel and Apple, is only on the new MacBook Pros, introduced earlier this year, and the new iMacs. Intel said in February that Apple will have a year-long head start in deploying the technology, which allows data transfer rates of 10Gbps.

LINK

Safe to say that they're already in bed together, and getting cozier all of the time!

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Year-long for driver development maybe. But for devices/peripherals, it would take longer as those needed drivers as well. For now, it will be a niche market tech for some time, until the PC industry mainstreams it.

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fteoOpty64:
Year-long for driver development maybe. But for devices/peripherals, it would take longer as those needed drivers as well.

RE: Thunderbolt,...for a year, if you want it, you have to buy a Mac. That's Intel's deal with them. PC makers are already in development, (drivers & such) and have been for a while.

RE: Z68 chipset,...it will come out all over in less than a week, but Apple has it now.

Apple and Intel are already hot & heavy for exclusivity deals and early release of components, and Intel has resources to spare for them. (or the cash on hand to build for them)

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