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Intel to start manufacturing chips for third party

by Pete Mason on 1 November 2010, 15:46

Tags: Intel (NASDAQ:INTC)

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As it stands, Intel is the world's largest manufacturer of computer chips, yet all of its most advanced facilities have traditionally been reserved for its own products. Even the older production facilities are normally kept for internal use and only rarely opened to third parties. This is why it comes as somewhat of a surprise that the company will begin to manufacture parts for a Silicon Valley start-up using its very latest technologies.

The company in question is Achronix Semiconductor, a fables manufacturer of field programmable gate arrays (FPGAs), and while the name may not be familiar, it is responsible for the world's fastest examples of these chips. This sort of silicon is primarily used in telecommunications infrastructure and industrial and enterprise networking equipment, and the market is expected to grow rapidly over the coming years.

The deal will see Achronix gain access to Intel's 22nm facilities once they comes on stream next year. This will allow the company to develop higher performance and lower cost chips, giving it a unique position among its competitors.

The start-up's CEO, John Lofton Holt, commented that "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".

Though the announcement may seem odd, it will be a good way for the chip-giant to help test out its new fabrication technologies. The comapny will be able to help tweak and fine-tune its latest facilities using another company's products, as well as generally testing how it performs on non-Intel designs. It is also reported that the deal will use significantly less than one per cent of Intel's total manufacturing capacity.

Though company representatives have confirmed that it has not invested in Achronix, neither has disclosed details of the financial arrangements behind the deal. It's also not clear whether this is the first of many such manufacturing agreements which could see the manufacturer starting to compete more directly with GLOBALFOUNDRIES and TSMC.

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Typo - I'm sure you mean “fabless” not fables
comapny too - speelchecker boys and gals? hahahahahaha