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Intel To Manufacture Rival ARM Chips In Mobile Push
An anonymous reader writes: Chip maker Intel has entered an unlikely partnership with British semiconductor firm ARM in an effort to boost opportunities for its foundry business. The licensing agreement, which was confirmed at the Intel Development Forum in San Francisco, means that from 2017 Intel's Custom Foundry will manufacture ARM chips -- used by smartphone giants such as Apple, Qualcomm and Samsung. On the announcement of its latest earnings report, Intel was clear to highlight a shift in focus, away from the traditional PC market, to emerging areas such as the Internet of Things and mobile -- a sector dominated by one-time arch rival ARM. It seems that Intel has now decided to surrender to the latter's prominence in the field.
It's more like 20 years ago. Digital Equipment Corporation sued Intel into buying their ARM processor business in 1997 (sounds kind of weird, but it's basically what happened), and Intel kept making the processors until 2006, when it sold the business.
2002-2005 was right when Intel was being controlled by their marketing division. Prior to about 2004-2005, the easiest way to improve performance was to increase clock speed. Consequently clock speed was pretty much doubling every 1.5 years, and the public correlated clock speed with CPU performance. Intel's marketing division, with the backing of management, forced their engineering division to increase clock speed at all costs.
The resulting fiasco was Netburst and Prescott, which ran headfirst into the laws of physics. To reach higher frequencies required higher voltages. But CPU power consumption is proportional to frequency times voltage squared. Prescott ran too hot to yield the promised performance increases and Intel's CPU progress stalled. This resulted in AMD capturing the CPU performance crown (which is why the 64-bit instruction set is AMD64).
Intel was trying to do the same thing with XScale - increase clock speed at all costs. They ended up with a mobile processor which doubled the clock speed but didn't yield 2x the performance.
What ended up saving Intel's butt was their laptop division. High power consumption is death for a laptop since it reduces battery life, and laptops weren't as big a market back then. So Intel's laptop CPU engineering division hadn't been pressured by marketing to increase clock speed. They'd come up with a CPU based on the Pentium 3 which made improvements which didn't increase power consumption. The Pentium M allowed Intel to quickly recover from their stumble, and became the basis for the Core, Core Duo, and Core 2 Duo CPUs, with the lessons learned leading to the Core i CPUs we use today.
But there was no Pentium M-equivalent for XScale. They'd lost too much ground to ARM to play catch-up, so Intel ended up jettisoning the project and selling it to Marvell. Their new tack was to reduce the power consumption of the x86 (and eventually AMD64) CPUs enough to compete with ARM. You call it a waste of time, but they eventually did reach power-parity with ARM once they moved to 14nm (partly because ARM was still on 28 and 22nm). But by then the ARM ecosystem was well-developed (iOS and Android), and the fact that you could run x86 software (Windows) on Intel's offering didn't matter anymore.
Intel needs to be viewed as several businesses, one of which is their discrete CPU business, another being their flash memory, yet another being the McAfee software acquisition, and yet another something called the foundry business.
Foundry refers to having a business where you are simply the manufacturer of chips for other companies for their specific purpose without selling into the end market. These other companies contract to Intel to be able to build anything from a network chip to a graphics chip to a microcontroller or virtually anything else (besides memory), either as a standard product off-the-shelf, or as an application-specific integrated circuit. In order for Intel to make that happen, they need to provide the know-how to these manufacturers of chips either directly or through providers of chip intellectual property. This includes logic libraries (standard cells, hence my name), memory cells and compilers for SRAMs, analog I/O cells, mixed-signal like ADCs and DACs, PLLs, non-volatile storage, design rule decks for the process rules, and a few other things that constitute the building blocks of any chip.
Other foundries such as TSMC, Global Foundries, etc. have the same model, though Intel's foundry manufactures more of their own CPU (and other) products than for other folks. Intel decided to farm out some of that capacity to third parties and make additional money on any spare capacity they might have, particularly with their leadership in logic processes over other rivals in the discrete CPU business. One of the key aforementioned building blocks is the IP offered by ARM for CPUs, GPUs and bus interconnect. This ARM IP needs to be validated to work in their silicon process, and this is the essence of the deal - Intel's foundry customers would not do business with Intel without basic blocks like the CPU since ARM is essentially the most important embedded CPU architecture in chip design currently.
The way the summary comes out makes it sound like Intel is manufacturing chips for its competitor, but it isn't necessarily so since the Intel microarchitecture is very highly vertically integrated as a business with their discrete CPU division whereas ARM itself is just a provider of IP with their microarchitecture. Yes, in theory Intel foundry customers could be making chips to compete in some segments of the Intel discrete CPU business, but that business is still largely dominated in the server and desktop markets by Intel and its associated software ecosystem. In the same way, ARM dominates the handheld device markets where Intel has had very little comparative presence.
I can guarantee that Mr. Krzanich and the Intel board would never allow their foundry business to cannibalize their current core discrete CPU business for a "competitor" if they felt it was detrimental to their overall financial and operating picture. This ARM deal is a piece of a larger plan of maximizing their ROI on their very very expensive chip fabs in a market where they have typically had a lead in logic process technology at least one node ahead of their competitors historically. That advantage can be very important in mobile due to the cost and power savings vertical transistor process nodes now offer along with superior manufacturing capabilities as the scale of their other businesses has long demonstrated.