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Chief executives from both Apple and Intel have reportedly met over the past year to discuss a contract manufacturing arrangement for the Cupertino firm’s in-house chip designs. A deal has not yet been reached, according to Reuter’s unnamed sources, but the move would allow Intel to fill idle production lines from its currently underutilized manufacturing plants and grow a contract-manufacturing business.
This would follow an ongoing strategic shift for Intel, which until recently had almost exclusively used its manufacturing prowess to build microprocessors for itself. That started to change back in 2010 when the company announced it would commit “less than 1%” of their total production volume to making field-programmable gate array (FPGA) chips for a company called Achronix. The resulting chip was pitched as a "fully configurable Intel Atom Processor" combining a 45nm Atom E600 with Achronix’s FPGA module.
The company followed up closing a similar manufacturing deal with Altera the same year and just recently scaled that relationship with a larger deal to build next-generation, high performance FPGAs on Intel’s 14nm Tri-Gate technology -- ditching manufacturing leader TSMC in the process.
An agreement to start production of Apple’s ARM-based SoCs seems at odds with the Intel’s efforts to break into the smartphone and tablet markets with Atom, but Reuters argues it could “offer a backdoor of sorts into large-scale production of chips for mobile devices.” If anything the company has shown it is open to contract manufacturing and snagging a customer as big as Apple is certainly an interesting prospect.
For its part Apple would be able to lower the uncomfortable dependency it has with Samsung for supplies and get the manufacturing diversification it needs. Whether a partnership does come to fruition will likely depend in part on Intel's replacement for CEO Paul Otellini, who plans to retire in May.
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