Intel Takes a Wider Role, Making Chips for Others

Intel Takes a Wider Role, Making Chips for Others

For the first time ever in the company’s history, Intel has agreed to manufacture another company’s, called Achronix Semiconductor, microchips. While the plan would require Intel to use a small fraction of its manufacturing capacity, it is important to note that Intel has always kept it microchips for itself. Many see this move as a sign that Intel is stepping into contract manufacturing, a business dominated by the Asian market. Intel has agreed to create chips that specialized in a type of “microprocessor used to accelerate computing tasks like shuttling network traffic and encrypting data.”

I believe that his move by Intel reveals its business plan for the future. While only require very little to do, the move is quite huge. Intel is trying to expand into the chip manufacture industry. I believe that this move will prove to be beneficial to the company in the long run because Intel is a trusted and proven microchip brand. Also, the company has all the necessary resources to make this transition work in their favor. However some expert disagree. Intel has in the past struggled to create major business beyond PC and sever chips. Meanwhile, the Asian companies are making specially designed microchips for Apple, Nvidia and Advanced Micro Devices. One expert, Mr. Richard is quoted saying about Intel’s “ Manufacturing is their crown jewel, and they’re finding new ways to monetize it.” Clearly, Intel needs to think careful before that make their next move and fully dive into chip manufacturing By starting small however, I believe that Intel can gain the necessary experience and learn how to meet the needs of a company other then themselves. Another advantage that I think Intel has is their already state of the art manufacturing. The chief executive of Achronix, John L. Holt, is quoted saying “Intel as a manufacturing partner should allow the company to make faster, cheaper products than its rivals and expand the market for these chips,” clearly giving Intel a competitive advantage. An average F.P.G.A. cost 1,000 dollars; Intel can sell them for 400 dollars. In the end only time will tell.

http://www.nytimes.com/2010/11/01/business/01chip.html?_r=1&ref=technology