Every now and then I get one of those emails that makes time stop for a moment or two. The earth-stopping gasp happened on Friday when I got an email from Intel inviting me to a briefing hosted jointly by Intel and TSMC.

For those of you who don’t know TSMC (Taiwan Semiconductor Manufacturing Company Ltd.), it’s the manufacturing and design house out of Taiwan that is used most famously in our industry by AMD and NVIDIA for the manufacturing of everything from GPUs to chipsets.

And now Intel is making a collaboration announcement between itself and TSMC.

The first thing that came to mind was Larrabee, Intel’s upcoming GPU, since that’s what we usually talk about being made at TSMC. Such thoughts are a bit ill conceived as one of Larrabee’s strengths is that it will be made at Intel’s fabs; any collaboration with TSMC would have to be about a very low cost, low performance device. In other words: Atom.

Today Intel announced that it and TSMC have agreed to a “memorandum of understanding (MOU) to collaborate on addressing technology platform, intellectual property (IP) infrastructure, and System-on-Chip (SoC) solutions.” We’re clearly early on in the process, Intel isn’t announcing any products or mentioning any shipping time frames; it’s just saying that in the future, some Intel products may be manufactured at TSMC.

The next line of the press release specifies which products: “Under the MOU, Intel would port its Atom processor CPU cores to the TSMC technology platform including processes, IP, libraries, and design flows. The collaboration is intended to expand Intel’s Atom SoCs availability for Intel customers for a wider range of applications through integration with TSMC’s diverse IP infrastructure.”

This isn’t about Larrabee, Core i7, Core 2 or anything else. Certain Atom based SoCs will be made at TSMC at some point in the future. This is huge simply because Intel is, first and foremost, a manufacturing company - the biggest in its industry. Its fabs have been a tremendous leg up on the competition; products made at TSMC would effectively lose that advantage. But does the move make sense?

The Specifics of the Announcement

Before we get to the why, let’s understand the what. Currently the Atom processor is no different than any other Intel CPU, it’s just a lot smaller and a lot cheaper. By the end of this year Intel should release Moorestown, a System-on-Chip (SoC) version that uses the Atom processor core and surrounds it with graphics, memory controller and video encode/decode engines:

Future versions of Atom will also continue to be SoC solutions. These are the processors that fall under the umbrella of today’s announcement.

Some, but not all, of these Atom based SoCs will be manufactured at TSMC. It’s important to note that Intel will continue to make Atom and Atom SoCs at its own fabs. However, to target specific markets, Intel will manufacture some designs at TSMC.

Intel was careful to stress that this move would extend the reach of Atom and not simply shift manufacturing capacity from Intel to TSMC. In Intel’s eyes, by leveraging TSMC’s capacity and IP (more on that later) Atom SoCs can be used in more designs by more OEMs.

Why Intel is Doing this and Final Words
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  • snakeoil - Tuesday, March 3, 2009 - link

    intel outsourcing atom production... its clear that intel is not making much money with the famous atom.
    maybe they should outsource the core2 and corei7 manufacturing to amd's 'the foundry'. think about it, because its clear that they aren't making too much money with the core i7 (big yields,expensive to produce).
  • GourdFreeMan - Tuesday, March 3, 2009 - link

    Will AMD and nVIDIA's graphics cards have to compete with Atom for fab space, or will they be aimed at different process nodes? I imagine TSMC might be reluctant to expand its production capacity in the short term considering the current state of the global economy...
  • pedobosz - Monday, March 2, 2009 - link

    May Intel go the way of Atari......... soon
  • Von Matrices - Monday, March 2, 2009 - link

    I'm still trying to figure out what the statement is implying:

    "Atom will continue to grow but, especially in price sensitive applications, if it starts requiring the creation of new fabs just to meet demand for Atom then you start to eat into the profitability of the chip."

    Is this implying that Atom is a money losing chip solely designed to fill excess capacity at fabs to prevent idling? (I wouldn't think so) Is this also implying that having fabs is a money-losing business - if you're not going to build one to satisfy demand, then why create them at all? Finally, if building fabs is a money-losing proposition, why would TSMC want to engage in this deal which requires expanding their production capacity?
  • AnnonymousCoward - Tuesday, March 3, 2009 - link

    If Intel would need to build another fab to support Atom's spike in volume, it might make more sense to give it to TSMC. Especially since in the future Intel might have surplus 45nm tools to take back Atom's volume.

    Some semiconductor companies that own fabs try to keep theirs at 100% and outsource the rest. Like if you bought solar cells for your house, it'd be a waste to invest in your peak wattage.

    For TSMC, it's just more business, and if they have to increase capacity, they have so many customers that it will get used anyway.
  • iwodo - Monday, March 2, 2009 - link

    With Centrino, you get the benefits from their marketing budget as long as you have pick the Intel components Requirement.

    Now Intel will properly licenses some Portable Audio IP, as well as their already own PowerVR SGX IP, and some other form of IP, you can simply pick and match the best possible combination for your SoC to be Manufacture in TSMC.

    You need a Home Server SoC? So you dont need Graphics, may be just an Atom with Intel Gigabit Ethernet, SATA Controller and USB Controller?

    If what i said above is true. Then I think intel has solve the Fundamental problem in Embedded X86. Intel cant use few designs for all. Customer in Embedded market wants customised SoC specially for their job due to Cost and Power requirement.

    So Now, how about an article comparing Atom and ARM Cortex A9 Single Core?
  • ssj4Gogeta - Monday, March 2, 2009 - link

    thank God they aren't going to manufacture anything other than Atom at TSMC. I was scared.
  • Roy2001 - Monday, March 2, 2009 - link

    You can subscribe the SOC chip with Atom core and it is made by TSMC, which means lower price. Intel would start to compete with ARM face to face soon.
  • Penti - Monday, March 2, 2009 - link

    You mean compete against the XScale/PXA sold to Marvell which they owned until recently? I don't really see it in the same class as ARM-based embedded systems. Intel has always been big on embedded systems though. And they will certainly continue to be with Atom. It will however as you noted compete with it's old PXA ARMs in some devices.

    Great news any how that they will be fab'd by TSMC.

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