Shrinking opportunity
The word on the street is that Intel is close to announcing its first product to be manufactured on the 22nm process. Codenamed Ivy Bridge, it will be the process shrink of its current - Sandy Bridge - generation of processors. Ivy Bridge isn't on the latest leaked roadmaps until next year, but Intel likes to start generating buzz nice and early.
One of the key benefits of a process shrink - in which each and every transistor is smaller - is that you can get the same performance as you did before, but with a lower power requirement and a smaller amount of silicon. This benefit is especially useful to the mobile device market, where battery life is a prime commodity.
Intel is the market leader when it comes to manufacturing processes, usually adopting a process shrink ahead of other major semiconductor fabs such as TSMC, GlobalFoundries and Samsung. But, as an analyst recently observed in a research note, Intel uses this advantage to compete at the other end of the spectrum from mobile chips, and make super-powerful PC and server chips.
It's generally thought that Intel's chip architecture is at a disadvantage in the low-power space, with ARM's architecture being more optimised for that environment. Intel may well argue to the contrary, but its continued absence from the handset market despite process leadership implies this is a real issue.
"Intel has no market share in the next wave of computing," said the research note. "Smartphones and tablets are where innovation and excitement are being created. Moreover, we do not believe Intel can overcome Apple and Google's first mover advantage in terms of attracting the attention of application developers.
"In order to afford to be a process technology leader Intel needs to aggregate volume as Moore gets more expensive. The solution is for Intel to become Apple's foundry, and we believe the company is pursuing this strategy."
The 22nm process is thought to provide a 30 percent performance improvement and will help maintain Intel's pre-eminence in the PC chip space, but operating as a foundry would enable Intel to ensure its expensive fabs operate at close to capacity all the time, something they need to do to be cost-efficient.
Apple is in the process of falling out with its foundry partner - Samsung - which is also a primary competitor in the mobile device market. Rumour has it that Apple has already spoken to TSMC, and no doubt GlobalFoundries would love its business. But Intel has the opportunity to step into the foundry game by landing the biggest customer of all.
The relationship between the two is already in place thanks to Intel chips being inside Apple Macs, and Intel's considerable investment in US-based fabs would presumably appeal to Apple. But the other foundries already have considerable investment and momentum in making chips based on ARM architecture. Intel would presumably have a lot of catching up to do before it could offer a similar service to Apple.
