Intel to manufacture mobile chips for other companies?

Intel to manufacture mobile chips for other companies?

Summary: The electronics giant says that it will expand its small contract manufacturing business, giving the firm a revenue boost in the wake of dwindling PC sales.

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TOPICS: Intel
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Intel says that the contract manufacturing section of the business is due for expansion, which will help shore up the company's finances as PC sales fall flat.

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According to Reuters, while the company has suffered due to dwindling PC sales, it is also behind rivals in the chip making space. Companies including Samsung which make chips suitable for mobile devices, such as smartphones and tablets, have cashed in as the popularity of these products explodes, while firms that did not jump on the mobile bandwagon early have lost out.

For decades, Intel has produced chips for personal computers. However, as sales of PCs fall in favor of tablets, by opening up factory lines to other businesses, Krzanich has the opportunity to find revenue in other sources.

When Intel expands the contract manufacturing sector of its business, it may garner interest from other companies that wish to use its factories to manufacture such chips.

If factories are opened up to others, components could be manufactured for the likes of rivals including Samsung, Nvidia and Qualcomm.

Intel CEO Brian Krzanich told analysts on Thursday:

"We're going to go much further. If we can utilize our silicon to provide the best computing, we'll do that. People who can use our leading edge and build computing capabilities that are better than anyone else's, those are good candidates for our foundry service."

In another move to tap the mobile space, Intel has pledged to quadruple the number of tablets with Intel chips in 2014 after improving its chip range for mobile devices. Tablets powered by the company's chips will range in price from $100 to over $400, according to the chief executive.

When asked about Intel's PC business in May, Krzanich said that while slumping sales have impacted the industry, the PC maker is finding "signs of stabilization." According to research firms Gartner and IDC, Q2 2013 was the fifth consecutive quarter of declining PC shipments. Specifically, Gartner said that 76 million units shipped worldwide during the second quarter of 2013, a 10.9 percent decrease from the same period last year.

Topic: Intel

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6 comments
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  • So...

    You would teach Intel how to make the chips you make all your money on? That would be, well, silly.
    Tony Burzio
    • Study up on the industry and you would learn...

      the design and the fab process are two different things. For example, Intel is really two big parts (not counting their systems business). There is design and fabrication. These outside design houses would not be "teaching Intel how to make chips". They would be handing a logical design and getting back finished parts. It is common throughout the industry, and Intel has unarguably the best and highest tech fab process anywhere.
      larry9
      • Absolutely correct.

        Many companies can design their own chips with the use of available design software, but can't manufacture said designs because it's just too cost prohibitive to now create and maintain an entire fab facility for producing just your finished products.

        It's been that way for PCB's and other industries, and is true of this industry, too.

        Intel is just open the door for more of this business, especially if a slowdown in x86 CPUs production idles a fab line or two.
        William.Farrel
        • True, and

          For at least two decades, there is a market for semiconductor fabs out there. Intel does not build their own fabs, they just order them. Anyone can buy the same fabs that Intel has, but since they are expensive and others still can do fine with cheaper processes, they don't.

          On the other hand, Intel has already purchased those expensive fabs for their products. It was OK, as long as there was demand for expensive "high end" CPUs. But.. thing is, that demand is drying recently. The reasons are many and not really relevant to this discussion. But the fact remains that Intel has lots of expensive fabs around, that they could either continue keeping for themselves and lose money, or rent to others and earn some more money. In fact, Intel could earn a lot of money that way.
          danbi
  • Chip fabrication

    How about Apple?

    I'm sure they'd be thrilled to be Samsung-free.

    ... or is that how Samsung pays Apple back for the judgement rendered against them? ...
    varase
  • Some interesting maneuvers

    Intel is breaking all sorts of longstanding rules now. I expect this will be disruptive. That is a good thing.
    symbolset