The move, which has been in the works for the past few years, will allow the Santa Clara, Calif.-based chipmaker to reduce its exposure to one of the growing risks in the semiconductor market: inefficient use of chip plants.
Fabs, the factories where chips are made, now cost more than $2 billion to build and fill with machinery. The high price tag has prompted most other semiconductor makers to partner on fab construction or outsource manufacturing. By making its communications chips in the same factories, Intel can spread its costs across more thinly.
Just as important, the company will use the opportunity to begin to manufacture chips, or subsections of chips, with silicon germanium transistors, high-speed circuits required in many communications chips. To date, Intel has not made chips with silicon germanium elements.
"We're architecting a process where we can do high-powered CMOS (complementary metal-oxide semiconductor, or standard silicon chips), low-powered CMOS, flash and silicon germanium," said Pat Gelsinger, Intel's chief technology officer. "We can mix and match any of the above."
The move to some degree comes as a result of history. Intel started to move aggressively into the communications market in 1999 during the heyday of the telecom boom. It has acquired more than 30 companies since January 1999, and most of the acquisitions have ended up in its communications group.
Some of the larger acquisitions outsourced manufacturing to Taiwan Semiconductor Manufacturing Co. For the most part, Intel kept these relationships in place.
That will begin to change next year when the chip behemoth opens its first 90-nanometer fabs. (The nanometer measurement refers to the average size of features on the chips made in the factory.). These fabs will run 24 hours a day and have the capacity to churn out millions of chips.
"They have to fill a 90-nanometer fab with something," said Peter Glaskowsky, editor in chief of the Microprocessor Report.
While the communications chips will be made on regular silicon wafers and contain standard transistors, a number will incorporate silicon germanium transistors. Silicon germanium is largely necessary in analog chips, which take sound, light and other real-world data and convert them to electrical signals. These high-speed transistors differ from standard transistors in that additional layers are added toward the final manufacturing steps.
IBM manufactures silicon germanium chipsets for cell phone makers and wireless LAN cards for Intersil, for instance.
Because of their higher speed and electrical properties, silicon germanium transistors work far better than standard silicon transistors for this type of data. Standard silicon transistors function like regular light switches, shifting back and forth from on/off states. By contrast, silicon germanium transistors act more like dimmer knobs and can capture gradual changes.
The silicon germanium elements of these chips will be tightly confined. "Silicon germanium adds a hunk of mass, which adds costs," Gelsinger said. Thus, the two different types of transistors will live together on the same chip.
Over time, as silicon transistors increase in power and speed, they will be used for tasks now handled better in silicon germanium, he added. Intel has already produced chips with integrated radios, a classic analog function, out of Silicon transistors.