Nvidia's CEO Bafflingly Suggests Intel Should Fab SoC's For ARM Industry

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News Posted: Sun, Mar 25 2012 1:39 PM
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.
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Why not? Look at Samsung. Do they only make screen for themselves? No. Anyone that wants can get them. Why? MONEY to further their other ventures.

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JDiaz replied on Sun, Mar 25 2012 6:14 PM

Intel needs their FAB advantage to be competitive with ARM on cost and power efficiency. Right now ARM is set to push for 32nm and 28nm FAB, but Intel will soon be pushing 22nm. It's keeping ahead of ARM on FAB that Intel needs to maintain to compensate for ARM's normal cost and power efficiency advantages.

Companies like Samsung are already in the ARM market and not competing against it. Thus their only concern is getting the most market share rather than worrying about leveraging technical advantages.

While Intel making ARM parts would only help to drive ARM costs down even further with increased competition and production capabilities of all the manufacturers combined.

If anything, Huang's suggestion was to help his own company as Nvidia isn't a manufacturer and needs to order parts from other companies.

Like one of the reasons we aren't seeing all next gen ARM chips go 28nm and 32nm is still showing up is because many of the manufacturers are having problems perfecting the 28nm FAB, but Intel obviously already got most of those issues handled with going with the even harder to handle 22nm and will likely be first to go 14nm as well in 2014.

So no, it's not in Intel's interest to help ARM at this point while they're still trying to push their own products.

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Schmich replied on Mon, Mar 26 2012 4:23 AM

Samsung doesn't sell their best screens, they keep it to themselves for their flagship phones. Also, Samsung hasn't been selling its ARM SOC either. It kept the Exynos to themselves.

Intel has trouble getting into the mobile market so that's why they're pushing their fabs to the limit. They're advancing faster than Moore's "law" in order to get an advantage in the manufacturing process and be competitive in the mobile market.

Why would Intel want to help ARM chip makers (some of their biggest competitors since they dominate the mobile market and ARM is coming to Windows now) with their largest problem and at the same time remove their main advantage against them? Does not compute...and Nvidia's CEO has never been on the bright side.

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Baffling? Hardly. Intel should become very strong in ARM, ARM is not going away. Its only going to grow. At some point, the datacenter will become more and more ARM as well. Intel should start making best of breed ARM processors before its too late.

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