Intel alliance with TSMC "fizzles" - bad news for Atom versus ARM in smartphones

Ashlee Vance at the New York Times writes: A Tie-Up Between Intel and TSMC Fizzles

Intel confirmed this week that a lack of customer demand has put the partnership on hiatus for the short term. Which is to say, there will be no jointly developed Atoms arriving anytime soon, although Intel continues to hope for the best down the road.

That can't be good for Intel's ambitions for Atom in the strategically important smartphone market. A year ago, in the first deal of its kind, Intel licensed its Atom microprocessor design to TSMC, so that third parties could design custom chips combining Atom, with technologies from many sources. The goal was to provide something similar to the UK's ARM microprocessor design, which is used in many custom chips, such as the A4 in Apple's iPad. TSMC, headquartered in Taiwan, makes chips for other companies. It invented the "fabless" chip industry, which is now the largest sector of the global chip market. This is a setback for Intel and it shows that Atom isn't yet ready for the custom chip market, or the smartphone market. Atom will eventually get there, but it has to match, or exceed, the advantages that ARM currently has, such as: - It has a large library of designs that companies can combine into custom chips. Atom does not. - ARM consumes very little power and it is a smaller design -- all very important in mobile markets. - ARM has a large installed base in smartphones, which means there is a large community of developers in the smartphone market with experience with the architecture. Interestingly, Intel used to make ARM based chips. It acquired StrongARM from Digital Equipment, and later renamed it XScale. However, it sold XScale to Marvell Technology Group in June 2006, so that it could concentrate on producing a version of its X86 microprocessor architecture for consumer products -- which became Atom. ARM is moving into larger products than smartphones, such as Apple's iPad, and also netbooks. It is encroaching into Intel territory while Intel is making little headway into ARM territory. Intel certainly has the talent and resources to make future Atom designs that are competitive with ARM in terms of power consumption and size. But the longer this takes, the more design wins for ARM. Once a company is committed to an architecture, it is very expensive to switch. It's interesting to note that Intel still holds an ARM license. - - -

[Please note: I am an "Intel Insider" a member of a small group that consults with Intel on various topics.]

Please see:

The Mysterious Apple A4 Chip - Where's MSFT's and GOOG's Chip?

Global Foundries to start pumping out 28 nm ARM Cortex A9 processors in 2H 2010

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