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Intel, Cisco strike chip deal, Intel official reportedly says

Intel and Cisco have reportedly signed a chipmaking deal, according to a report quoting an Intel official in Korea.

Has Intel Korea jumped the gun? A report in the Korea Times claims Intel and Cisco have struck a manufacturing partnership, though neither company has made an official announcement.

"Intel has recently signed an agreement to manufacture Cisco's networking chips on a contractual basis, said Lee Hee-sung, country manager at Intel Korea," reads The Korea Times report.

It continues: "The deal with Cisco looks significant. If Intel successfully produces chips with designs offered by Cisco, then it will get additional momentum to effectively grow its foundry business," the newspaper said, quoting a source at Samsung Electronics.

As a side business, Intel is a chip foundry -- or contract chip manufacturer -- on a relatively small scale, with customers like Netronome, Achronix, Tabula, and most recently Altera.

The deals so far revolve mostly around FPGAs or field-programmable gate arrays, which are typically configured by a customer after manufacturing.

But this side business could get much larger as Intel's main PC business shrinks. To compensate for a smaller PC market, theoretically, Intel could expand its contract manufacturing business and make chips for large clients like Apple.

Intel in the U.S. declined to comment. Cisco has not yet responded to a request for comment.