Next Intel CEO to guide new business, maybe deal to stamp out Apple processors

“Intel’s next CEO is likely to shepherd the top chipmaker into a growing contract-manufacturing business, a strategic shift that could lead to a deal with Apple Inc and give it a fighting chance to make inroads in the mobile arena,” Noel Randewich and Nadia Damouni report for Reuters.

“Manufacturing chips on behalf of other companies is a major departure for Intel, which for decades has based its business on using its manufacturing prowess to offer its own PC chips superior to rival products. As PC sales contract and Intel’s fabrication plants operate at less than full capacity, the chipmaker sees an opportunity to fill idle production lines while earning new revenue,” Randewich and Damouni report. “Such a move may also offer a backdoor of sorts into large-scale production of chips for mobile devices, where Intel has made little headway after underestimating the impact of the iPhone and iPad and falling behind more nimble rivals.”

Randewich and Damouni report, “Intel said last week it will open up its prized manufacturing technology to make chips designed by fellow chipmaker Altera — snagging its first sizeable customer in a contract manufacturing, or “foundry”, business expected to grow. That has spurred talk of an Apple deal. A source close to one of the companies says Intel and Apple executives have discussed the issue in the past year but no agreement has been reached… ‘This is potentially huge,’ said JMP analyst Alex Gauna. ‘The new CEO will have a very large opportunity to take this to the next level. Those discussions about taking on Apple as a foundry customer are going to be very complex and very contentious.'”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

12 Comments

    1. If Intel begins manufacturing ARM processors in huge volumes for Apple, that move constitutes an acknowledgment that its technology isn’t going to be a big player in mobile computing.  Giving up its plans in mobile will provide much of the spare capacity that Intel needs to supply Apple.  The remainder will be freed up as PC makers lower their orders in line with sales.

      An Apple deal would potentially put Intel on a path toward becoming a contract fab (foundry).  That’s a tough transition for Intel.  It is a demotion within the industry from ‘greater’ to ‘lesser.’

  1. Well I suppose it will be the change between predominantly Intel designed chips to Apple designed chips that is considered contentious. In the short term this is win win but I guess that potentially if Apple designed chips go up as Intel designed ones go down especially as it will in effect be admitting they have lost the design side of the mobile war then it could have big implications for all concerned. In particular if Apple starts to bring its own designs in to the mobile mainstream starting wit the Air or Air variants.

  2. Try thinking a little bigger. If there is a new generation of AppleTV devices, possibly with a box more like a Mac mini, would it not also have a A6 chip in it and run iOS apps? What if this is also the first step towards a Macbook or Mac running on an A6 chip with iOS capabilities? Cheaper, lower power, able to run and view all the iOS library. Maybe easily controlled using an iOS device wrapped around your wrist like that iWatch that everyone is talking about. Intel would want in on that.

    1. Also, Apple may have designed an entire SoC that houses the A6, RAM, Bio Identification, with port, WiFi, AirPlay and/or Bluetooth communications … all on one chip. Some lower powered smaller iOS devices, maybe the next big thing and they needed a little something very new. Never been done before. The kind of thing Apple could do with that P.A. Semi technology they bought a few years back.

      Copy that Samsung and Google!

  3. Apple has reached a 200+ million annual run for their SoCs. That’s approaching the size of the entire PC market. It would be a huge boost to Intel to snag Apple.

    At those rates though, it might be more beneficial for Apple to build their own fabs and license Intel manufacturing IP.

  4. Intel’s market can dry up fast and they know it. They need this.
    Intel want’s to think they are the leader in chip engineering, but they will have to step up to the fact that Apple is handing them their own ass.
    Remember when Apple switched to Intel? That was a good move and a humble move. My how tables have changed.

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