“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.]