As predicted in our post of January 23rd, Intel is to out-source Atom. The reasons are very simple, Atom has to be a low margin part as it competes for slots in end-user products now costing around $400 but expected to decline to $100-200 within a year.
Intel likes to build its own processors, but its fabs are so expensive that they require high margin products to justify the expense of building them, operating them and investing in the process R&D which the fabs use.
Putting the Atom out to foundry with TSMC will remove the manufacturing and process R&D overhead. At the same time, TSMC, in a downturn at the foundries as IDMs reduce their foundry business, is no doubt happy to offer Intel a good price.
So Intel will get its Atoms at a price which will allow it compete with the $20 BOMs being offered by the likes of Freescale and Qualcomm who are competing with the Atom for netbook slots.
There is another, possible reason why Intel is out-sourcing its parts. Intel traditionally can't do low power, it has always buili its ICs for speed. TSMC, which makes low-power chips for the wireless people like Qualcomm, can make low-power chips. That could be a major motivator for Intel going to TSMC.
The significance is that Intel is going outside for leading edge processes. In the past it has put parts out to foundry, like the PC chip-sets which TSMC makes for Intel, which don't require leading edge process technology.
Now it's going for leading edge foundry. But it's the same leading edge foundry as its rivals will be using.
So Intel will not be able to claim for this particular product line, as it has claimed in the past, that it will get to new process nodes faster than anyone else.
Woah, I can't find this info anywhere else - except for a few people speculating. Is this a scoop, are the others late, or did this entry go live before NDA expiry by mistake? :) I guess if this disappears in a minute, I'll have my answer, hehe.
Highly unlikely. Intel is already the low cost producer, the design is tightly coupled with Intel's process, it's already very low power, Intel has lots of capacity and this product has great margins.
Thanks, Anonymous, we'll see
Arun, according to my sources, Intel will announce this, officially, tomorrow morning, Santa Clara time.
Considering the die size, Intel probably gets about 2400 good die per wafer, or about $1 die cost. Packaging and test would still leave it well below $5. You think it has bad margins and they have to go to an outside supplier to play in the $20 market?
Do the math.
Thanks Ephud, the cost may not be the only reason but, for whatever the reasons are, Intel will announce it is out-sourcing Atom to TSMC tomorrow.