Intel outsources Atom manufacturing

 

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By Reuters

Posted on 2 Mar 2009 at 10:59

Intel has announced it will outsource the manufacturing of its Atom chipset to TSMC.

The two companies have signed an agreement which will see Intel offer TSMC its design libraries for the Atom chipset, effectively allowing other customers of TSMC to easily build Atom-based products.

However, Intel will retain control over the products that TSMC can create Atom-based chipsets for.

Intel announced in January it would shut plants in Malaysia and the Philippines and its one surviving factory in Silicon Valley, cutting as many as 6,000 jobs. At the same time, the firm plans to spend $7 billion over two years to build next-generation, 32nm chip manufacturing capacity.

The move would still surprise many, as Intel has steadfastly maintained it will manufacture its own microprocessors, though it has previously outsourced some processes, including chipsets and wireless devices to TSMC and other foundries.

As the cost of chip production has skyrocketed rivals such as AMD have migrated to fabless or "fab-lite" strategies. A deepening recession is now curtailing tech spending while exerting pressure on companies to safeguard profit margins by shaving costs.