The Santa Clara, Calif.-based chipmaker is putting venture capital money and research and development effort into microelectricalmechanical systems (MEMS), which can be thought of as chips that both think and move.
MEMS are essentially semiconductors with mechanical parts that both harvest data and issue commands based on the data. A MEMS with a miniature tuning fork, for instance, can gather information about the direction of sound waves, which can prompt a command to shift the position of a microphone for better sound quality.
One application Intel will likely target is "microfluidic" devices, or mini-refrigerators inside PCs that squelch internal heat, said Bob Rao, an Intel Fellow who is managing Intel's MEMS research.
Like a home refrigerator, a micro-refrigerator depends on liquids, and "to move this fluid around, you need little pumps and valves," he said.
The MEMS market has actually been around for years. Brake sensors and engine heat sensors are examples of MEMS devices found inside cars today.
Intel's move into the market comes as a result of opportunity and convenience. The market is about to grow dramatically, according to some analysts. At the same time, it isn't a difficult one for Intel to enter.
"MEMS technology turns out to be very close in nature to silicon technologies. The kind of things we have to do are similar," said Sunlin Chou, senior vice president of Intel's Technology and Manufacturing Group. "With an incremental spending on tools, we have been able to fabricate MEMS devices and rapidly move into prototyping."
Chou pointed out that MEMS devices also take advantage of Moore's Law, which states: "The number of transistors a chip can hold will double every 18 to 24 months, as transistor size shrinks." Over time, manufacturers can shrink the transistors, making chips smaller, more reliable, less power-hungry and cheaper to make.
"The advantage Intel has in this field is in yield management and manufacturing," Chou said.
While similar to microprocessors, MEMS devices require additional manufacturing techniques because they contain mechanical elements. Typically, the chip is finished like a microprocessor and then "silicon or other components are etched away to free up the moving parts," said Rao.
The company is taking a multi-pronged approach to the market. Rao is managing research projects at Intel's plant in Israel.
Concurrently, Intel Capital, the company's venture funding arm, is making seed investments in MEMS companies such as North Carolina-based Cronos Integrated Microsystems. So far, six venture investments have been publicly disclosed. Generally, these seed investments range from $1 million to $5 million, said Alex Wong, an executive with Intel Capital.
Competitors, of course, aren't sitting still. Texas Instruments, which currently makes MEMS devices, showed off a MEMS project this week that allows corporations to network computers through laser beams and rotating mirrors, rather than cables.
While most MEMS devices to date have been used to gather ambient data like temperature or pressure, they are becoming more complex, said Marlene Bourne, senior analyst at Cahners In-Stat.
The pharmaceutical industry, for example, is adopting MEMS devices rapidly for new drug testing. Another lucrative application: blood-screening sensors that can perform complete lab tests at bedside.
As a whole, MEMS devices accounted for $3 billion in revenue in 2000. By 2005, the market will quadruple to $12 billion, Bourne said. More importantly, many of the more complex MEMS parts for the optical communications industry could sell for several hundred dollars each, she said.
By contrast, sensors will drop to an average price of $1, Bourne said.
The MEMS effort also fits in with Intel's plan, begun last decade, to diversify its businesses beyond the PC. While diversification started slowly, the pace has been picking up. The rapid decline of PC processors will also likely light a fire under the effort.
"What you are seeing is steam picking up on groundwork that was put down years ago," said Dean McCarron, principal analyst at Mercury Research. "No doubt about it, (PC microprocessors) will be a growing business, but the huge growth days of the '80s and '90s are gone."