Intel Gets Help Putting Atom Into More Gadgets

While expanding Intel's potential, the TSMC deal is an attack on companies making competing processors for smartphones and other handheld computers.

Intel on Monday said it's collaborating with semiconductor manufacturer TSMC to deliver technology that would drive Intel's low-cost, low-power Atom processor into a broader set of gadgets ranging from smartphones and mobile Internet devices to mini-laptops.

The collaboration, called a "memorandum of understanding," has TSMC using its hardware designs, manufacturing processes, and intellectual property in combination with Atom and Intel chipsets, executives from both companies said Monday in a teleconference with reporters and analysts. The result would be new products that Intel would sell to consumer electronics and computer manufacturers.

"We will be picking the [market] segments," said Sean Maloney, chief sales and marketing officer for Intel. Maloney declined to say when the Intel-TSMC hardware would be available. The deal does not have Intel providing TSMC with any of its manufacturing processes, which are primarily geared toward making processors for desktops, laptops, and servers.

In general, Intel is hoping TSMC can take Atom into consumer electronics, smartphones, and mobile Internet devices, which fit somewhere between an advanced cellular phone and a mini-laptop, also called netbooks. Because Atom consumes too much power for use in smaller devices, it's mostly used today in netbooks.

Intel, however, is working on a new Atom-based platform, code-named Moorestown, that's designed for smartphones and MIDs. The platform comprises a system-on-chip code-named Lincroft, which integrates an Atom processor, a graphics processor, memory controller, and video encoder/decoder. The product is scheduled for release in late 2009 or in 2010.

Intel needs TSMC, which stands for Taiwan Semiconductor Manufacturing Co., because Intel does not have manufacturing capabilities for customizing a full-set of technologies to fit the many different device designs for non-PCs. "TSMC has the ability to manufacture a much wider range of chips than Intel does," John Spooner, analyst for Technology Business Research, told InformationWeek "Working with TSMC gives them access to a much broader set of device categories."

While expanding Intel's potential market for Atom, the TSMC deal is also a "direct attack" on companies making competing processors for smartphones and other handheld computers, such as ARM, Jack Gold, analyst for J.Gold Associates, said in an e-mail. ARM, which makes chips for the popular Apple iPhone, is trying to take its processors into larger devices from handsets and other gadgets, while Intel is moving in the opposite direction.

"The battleground in the middle will be aggressive and potentially bloody, with huge potential returns," Gold said.

Intel could also use TSMC for building Atom-based platforms that support WiMax, a next-generation wireless broadband technology for handheld devices and PCs, Gold said.

Intel, which uses TSMC today for other wireless chips, is investing billions of dollars in the promotion and development of WiMax globally. Financial details of the latest Intel-TSMC deal were not disclosed.

The latest announcement followed last month's announcement by Intel that it would spend $7 billion over the next year on manufacturing facilities in the United States to produce its next-generation 32-nanometer processors, which will be the company's first to incorporate graphics technology and a memory controller on the same piece of silicon as the main processor.

Smartphones, BlackBerry, and netbooks ... how do companies manage these devices? InformationWeek has published an independent analysis of this topic. Download the report here (registration required).

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