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Intel Recruits TSMC To Produce Atom CPUs
arcticstoat writes "Intel has surprised the industry by announcing a memorandum of understanding (MOU) with Taiwanese silicon chip maker TSMC to manufacture Atom CPUs. Although TSMC is already employed by AMD, Nvidia and VIA to make chips, it's not often you see Intel requiring the services of a third fabrication party. Under the MOU, Intel agrees to port its Atom CPU technology to TSMC, which includes Intel's processes, intellectual properties, libraries and design flows relating to the processor. This will effectively allow other customers of TSMC to easily build Atom-based products similarly to how they might use an ARM processor in their own designs. However, Intel says that it will still pick the specific market segments and products that TSMC will go after, which will include system-on-chip products, as well as netbooks, nettops and embedded platforms."
So, you close fabs in USA and you make us even more dependent on oversee production. Way to go Intel!
The desktop CPU and its high profit margins is dying.
This news did some interesting things to TSMC's stock today.
http://www.google.com/finance?q=NYSE:TSM
It shot up to ~$7.82 in very early trading, but closed down 1.19% at $7.45.
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Does this mean that TSMC has Licensed Intel's HKMG (High-K Metal Gate) 45nm process?
Or does that mean that the TSMC-made Atom chips will be more leaky (and thus, using more power)?
Still awaiting (stock) 4 GHz CPUs.
Actually, the Intel Atom can execute up to two instructions per cycle. The performance of an Atom is equal to around half that offered by an equivalent Pentium M. So I'm not sure why you think it's so slow.
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I worked at Intel in a temp position last year, and this is nothing new. It was the dirty secret around the fab that Intel was using TSMC for certain runs, and it was only a matter of time before something large scale was announced. Fabs are not profitable without huge volume and both AMD and Intel are feeling the pressure.
Remember how IBMs PC-BIOS was reverse engineered and there wasn't anything IBM could do about it because the reverse engineering was done legitimately?
http://en.wikipedia.org/wiki/Reverse_engineering#Binary_software
If Intel licenses its 32nm manufacturing process to TSMC it will make it harder for TSMC to create a new 32nm for creating chips for other manufacturers. Intel could claim TSMC used information given to them under a license agreement. It will be hard for TSMC to claim any new 32nm process wasn't created using information covered under that license.
Intel does not need any fabbing capacity. What they do like is to mess with AMD partners.
Let the games begin.
Obviously you know nothing about Taiwan. This isn't China we're talking about. They do have nationalized health care, although they are plagued with the same problems such programs face in Europe everywhere else. They are required to pay some level of compensation for overtime, but it isn't extravagant. They do have guidelines for worker safety and labor laws are fairly stringent. Not quite to the extreme of the US, but it is moving in that direction.
Taiwan does have lower slightly lower corporate taxes than the US and last year I know the proposal was made to lower by 5% I believe, but I don't know if it ever went through. The US could easily address this situation, but the Obama administration seems intent on doing the opposite.
They do have unions in Taiwan although I'm not aware of one for the semiconductor industry; unions aren't necessarily a good thing anyway. I do know from personal experience that jobs in the semiconductor industry, everything from engineering on down to manufacturing, are in high demand. They pay quite well.
Wages certainly are lower in Taiwan than the US, by a good bit, but they are also significantly higher than in China. The key distinction is that quality is guaranteed and the companies are more trustworthy. It's very unlikely a Taiwanese company is going to go behind your back rip off your designs.
Companies outsource to Taiwan or Korea when they don't want quality close to what could be gotten out of Japan but without paying the excessive cost. Companies go to China when they want maximum savings even at the expense of quality.
That said, nowadays even Taiwan, Japan and Korea are outsourcing some of their manufacturing to China because even for them it's not as cost-effective as they'd like. The problem is that many people still lump Taiwan together with China so not only are they incapable of competing on price, but they're stuck with the perception of making cheap knockoffs.
Of course, the Taiwanese government bureaucracy is at fault for doing a piss poor job of marketing their own country in every way. And Taiwanese companies are a bit too reluctant to give up OEM manufacturing. They should be building their own brands on the level Korea has done over the last decade or so. Of course, Korean companies have had heavy government backing whereas Taiwanese companies have generally been left to fend for themselves.
You know netburst is dead, right? The megahertz race is over.
CPU makers have decided to make CPUs with better architectures, better branch prediction, higher IPC and such instead (besides having more cores) i.e. a better CPU, instead of crap like netburst, but then trying to scale it to ridiculous speeds (and failing).
This is Intel saying they MIGHT outsource some manufacturing to TSMC for the Atom SOC applications. Intel has their own pretty substantial fab facilities. However, they're out on this netbook limb now. If it takes off, they're going to need extra manufacturing to meet demand. If it doesn't take off, they don't want to have a lot of capital tied up in extra fab facilities.
I'm not a big Intel fan, but this is a fairly astute move on their part and buys them some flexibility in the medium-term depending on where netbook sales go.
Best,
I wouldn't be surprised if the Atom profit margin is higher than an average desktop CPU (obviously not the $1000+ i7s, but I doubt margins are high on the typical low-clocked dual-cores that compete with Athlons). Sure, the profit per sale is lower, but it they sell more then that compensates.
I have one Atom system here already, and I'm thinking of building a couple more in the next year because they're cheap, run Linux decently and use relatively little power; I wouldn't buy three Core 2s in a year.
Maybe, just maybe, because Pentium M wasn't exactly a speed demon to begin with?
Sometimes Intel doesn't have to move it's product to TSMC directly. In the case of one of their fabs they simply sold the product to a third party then that company moved the manufacturing overseas, thereby avoiding the responsibility of "offshoring" themselves.
Not good.
Atom cpus are not especially profitable. They're cheap. Intel is handing them off to TSMC and probably hoping like hell that the market still craves high performance. Unless more software is parallelized, things are going to be bad!
Note: I parallelized my software and the Core i7 is awesome. Superlinear speedup is easy to achieve with a dedicated L2 cache. The Phenom II would also give great performance. So I would bet that Atom and other underpowered cpus are a fad. They will not look very good next to a mobile Core i7 that is 20x faster when all cores are used.
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Even so, Intel just released a 3.5Ghz Core 2 Duo chip. So while the Prescott P4 still holds the record for fastest clocked x86 CPU at 3.8Ghz, it will probably be eclipsed by something in about a year or so. We'll probably have 4Ghz in a couple of years, potentially sooner if Intel starts to feel threatened by AMD again.
Actually, Atom chips in quantity are really cheap. We're talking in the range of $12 each for the low-end models, and maybe $70 for the super high-end ones. The margins aren't huge.
In fact, Ars Technica speculates the reason for outsourcing to TSMC is that fabs are expensive, and making large volumes of low-margin parts (that may or may not sell) may not pay for the expensive shiny new 32nm fab Intel is rolling out. Instead, Intel will let TSMC do the investment in their fabs, and have them amortize the cost of the fabs among all its customers. Intel's 32nm fab will be used to make higher margin chips. If the new 32nm Atoms sell poorly, then Intel just reduces the quantity ordered from TSMC. If they take off and Intel finds their 32nm fab has spare capacity, hey, make more.
http://arstechnica.com/hardware/news/2009/03/atom-cant-feed-rd-monster-intel-outsources-chips-to-tsmc.ars
Basically, Intel's betting that people will want higher-margin higher end chips, and that the whole market won't suddenly collapse into purchasing Atoms only. Thus, rather than risk making Atoms on an expensive new fab line that may not sell, make chips that will probably sell and pay off the fab sooner. TSMC's 32nm fabs will be paid for partly by Intel, and mostly by all the other customers of TSMC.
If you got the money:
http://en.wikipedia.org/wiki/POWER6
It will only be a matter of time before the knockoffs come marching in.
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Only partly right - nobody has gotten this point.
Intel is not having TSMC making its own chips.
What they ARE doing is licensing its Atom design to allow other companies to use it in their ICs (SOCs).
Intel does NOT want to be in the low margin ASIC business -- it DOES wants to under-cut the embedded RISC processor market (ie MIPS/PowerPC). The RISCs are potential replacements for x86 on netbooks (and later notebooks). Esp using optimized linux releases. It is a defensive move to keep its tentacles in the market.
Embedded RISC SOCs are often priced $5-50. Much lower than Intel's margins. TSMC has the operations to deal with ASIC/COT flow customer - Intel really does not want to mess with that.
I think you are confused about the definition of margins. The margin is the difference between what it costs to manufacture a product and what it sells for (think profit). It doesn't have anything to do with the ASP (average selling price). Atom is very cheap to manufacture due to its small size (you can fit on a lot of Atoms on a wafer). The margins on Atom processors are much better than other low end Intel processors.
I know it's a really big thing to ask, but doesn't anybody read TFA? Nobody? Maybe the problem is with the freakin headline, "Intel Recruits TSMC To Produce Atom CPUs". It's complete nonsense, Intel is not outsourcing Atom!
Just try reading this a few times: "This will effectively allow other customers of TSMC to easily build Atom-based products similarly to how they might use an ARM processor in their own designs."
This is all about specialised SoC (system-on-chip) designs, where the only option right now would be to license an ARM processor design. You want to create some special chip for medical purposes? License the Atom design, add the custom logic you need, ship to TSMC.
In contrast, this has nothing to do with outsourcing. Intel will still manifacture its own Atom chips and will still design new Atom chips as laid out in its roadmap.
Atom first appeared in consumer devices such as Netbooks. Millions of chips ... but not the billions of chips in the addressable market.
As Atom is designed into embeddable products which require special characteristics such as automobiles (e.g., embeddable, low voltage, extreme temperatures), customers will want to save money by adding application-specific "logic blocks" to the silicon, creating a single "system on a chip".
Intel's fabs are not well suited for economic production of small, custom chip runs to make these custom chips. TSMC is in the business of making such chips as the go-to fabricator for the world's soft fabs. So, Intel is handing off custom fab business it does not want to TSMC, while at the same time expanding the Atom market and nailing down a world-class "second source".
After Intel acquired Mobilian, they were still using TSMC to fab their 802.11/Bluetooth chips for a couple of years afterwards.
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I tried an Atom based Aspire today and IE was very slow loading. Those eeePCs-like systems are cute but running DOS isn't my thing anymore. So it's a trade off. Portability, battery life and features vs performance. I didn't try but I'm not expecting to be able to watch HD movies off of one.
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Two instructions per cycle if the planets are aligned. The core has the same limitations the Pentium core had with pairing, notably:
* Only a subset of instructions can be executed simultaneously.
* If there is any dependency between the two instructions, they cannot be executed simultaneously.
Yes, the hardware has two integer pipelines, but the benchmarks are somewhere in the range of 1-1.5 instructions per clock with unoptimized code. That number can get larger, but requires an optimized compiler. In the Windows world, that means years. In the Linux world, that means waiting on gcc.
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