Intel Begins Foundry Service Business with FPGA Manufacturer Altera

Intel, the world's largest semiconductor chip maker, has softened its stance on building chips for other companies that it doesn't directly compete with and will start producing parts for Altera. Never heard of them? Altera manufactures "programmable logic" chips with structures like reconfigurable processors and memory as building blocks for complex System-on-Chip (SoC) designs. Typically this requires bleeding-edge manufacturing technology and Intel's 14nm will benefit them greatly versus competitors like Xilinx.

The upside for Intel is that it can generate additional revenue and offset the rising costs of R&D. By sharing its manufacturing plants, Intel is also able to ensure that its fabs are running near capacity, especially now that the PC market is slowing down.

"It's a step in terms of building into a business level we wish to achieve," Sunit Rikhi, Vice President and General Manager of Intel custom foundry told Reuters. "There's no doubt in my mind the foundry will be a significant player in the future."

Altera Intel

The Santa Clara chip maker will produce programmable parts for Altera using its 14nm trigate transistor technology, but it's what lies ahead that's most interesting. This isn't the first time Intel has agreed to produce chips for other companies, however it represents one of the larger deals, as Altera is one of just two leading programmable chip makers. It means Intel is willing to consider taking on customers that in the past it wouldn't have. Even Apple could end up a customer, especially since the Cupertino company would like nothing more than to sever ties with Samsung.

"If and when we are called upon to serve large mobile customers who can drive a lot more volume, we could serve them today in terms of capability," Rikhi added. "I'm confident we have a very strong platform of offering upon which we can scale."