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Intel creating first chip for outside manufacturer

In a move signaling a possible shift in Intel's business model, the company will design a new chip for semiconductor firm Achronix Semiconductor.

Intel traditionally builds chips for its own use, but it's now branching out to create one for another manufacturer.

Intel will create chips based on its 22-nanometer technology for Achronix Semiconductor, Achronix announced today. This marks the first time Intel is designing a chip for another manufacturer and may indicate that the chip giant is looking to do some contract manufacturing for outside customers.

Based in San Jose, Calif., Achronix will use Intel's 22-nanometer chips to develop its own Field Programmable Gate Arrays (FPGAs). FPGAs are integrated circuits that can be programmed after they've been manufactured, allowing customers to adapt them for their own needs.

Known as the Achronix Speedster22i, the new FPGA will see as much as a 300 percent gain in performance, 50 percent lower power drain, and 40 percent less cost than FPGAs build on 28-nanometer technology, Achronix said. Geared for telecommunications, networking, industrial, and consumer markets, the FPGA is expected to drive such applications as 100G and 400G Ethernet networking and LTE mobile communications, added Achronix.

The Speedster22i will also be the first commercial FPGA family that can be made in the U.S., setting it up for military and aerospace customers, which require that such chips be made domestically for security reasons.

"Intel has the best process technology in the world and we are privileged to have formed this strategic relationship, which enables simultaneous improvements in speed, power, density, and cost," Achronix CEO John Holt said in a statement. "The combination of the advanced 22nm process from Intel and the advanced FPGA technology from Achronix enables Speedster22i to eclipse other FPGA solutions expected to hit the market in the next few years."

Though Intel has downplayed the new deal as a sign of things to come, some analysts see it as an indication that the company is jumping into the contract manufacturing business, according to The New York Times.

"I think this is only the beginning of Intel manufacturing for others," said Gus Richard, a microprocessor industry analyst with Piper Jaffray, as quoted by the Times.

The deal will get off the ground sometime next year, according to the Times, when Intel will begin making the chips for Achronix.

First demoed by CEO Paul Otellini at the Intel Developers Forum a little more than a year ago, the 22-nanometer microprocessors are the latest chips being pushed to the market. Squeezing 2.9 billion individual transistors in an area the size of a fingernail, the 22-nanometer chip has challenged traditional manufacturing processes, which use conventional photolithography, a method by which circuits are printed onto semiconductor chips.

Intel recently announced that it would spend between $6 billion and $8 billion to build a new chip manufacturing plant and upgrade its existing fabrication plants in Arizona and Oregon. The new and existing plants will be put to work making the 22-nanometer processors, which are being designed to provide higher performance and longer battery life at a cheaper cost.