Intel First: Making Advanced Chips for Third Parties

Achronix Semiconductor Corp. announced yesterday that it will churn out a new line of their chips in Intel's forthcoming 22-nm technology factory. This is a first: Intel has put their older manufacturing lines at other companies' disposal, but never have they opened one of their new factories to an outsider.

Some have said that this signals Intel's entrance into the now mostly Chinese and Taiwanese foundry business of chip manufacturers for hire. Gus Richard, a microprocessor industry analyst with Piper Jaffray, said as much to The New York Times:

“Manufacturing is [Intel's] crown jewel, and they’re finding new ways to monetize it.”

However, Intel's Bill Kircos, Director, Product and Technology Media Relations, wrote in a company blog post that the agreement is "not currently viewed as financially material to Intel’s earnings."

He echoed that sentiment in an email to IEEE Spectrum. "Our factories are our prized possession," Kircos says. "Still, this agreement with Achronix would only make up significantly less than one percent of our capacity."

Achronix, develops Field Programmable Gate Arrays--customizable chips that users can tap for a variety of telecommunications, military, and aerospace applications. They can be manufactured in smaller quantities than Application-Specific Integrated Circuits (ASIC) which, as The Register describes, require large production runs to make economic sense:

"It might take $30m or $40m to develop an ASIC to do a particular job. . . . For very high volume products—with hundreds of thousands to millions of units where the cost per unit has to be low—you want an ASIC. But in places where you need a chip that might only require thousands to tens of thousands of units to satisfy an entire market, an FPGA, while more expensive to buy, is better because it is less expensive to make and is correctable in a way that an ASIC is not."

Two other FPGA companies, Xilinx and Altera, currently control 85 percent of the market share, EE Times reports.

Achronix suggests in a press release that the Speedster22i they'll manufacture in Intel's factory will help them compete, writing that the chip will "eclipse other FPGA solutions expected to hit the market in the next few years." The release also says the chip will be the FPGA equivalent of an ASIC of over 20 million gates. Since Intel's plants are in the United States, the company says, the device will be ideal for military applications. IEEE Spectrum's Sally Adee discusses reasons why "on shore" silicon manufacturing is important for security in her feature Hunt for the Kill Switch.

What this means for Intel isn't clear. EE Times reports that some had recently speculated that Intel, which made their own programmable logic chips in the 1980s, would acquire Xilinx or Altera. Achronix CEO, John Lofton Holt, told EE Times that the arrangement,

"[S]peaks to how important they [Intel] see FPGAs to the future of the semiconductor industry." But, Holt said, "If Intel wanted to be in the FPGA business they would be already. They certainly have the cash."

I asked Intel's Kircos whether Intel had any plans for manufacturing their own FPGAs. "We're not going to speculate on that," he says.

Image: Achronix

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