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Intel Recruits TSMC To Produce Atom CPUs

ScuttleMonkey posted more than 5 years ago | from the plug-and-play-companies dept.

Intel 109

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."

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CmdrTaco Recruits AC to Keep Slashdot Frosty (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#27045985)

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Re:CmdrTaco Recruits AC to Keep Slashdot Frosty (2, Insightful)

gravos (912628) | more than 5 years ago | (#27046261)

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.

Re:CmdrTaco Recruits AC to Keep Slashdot Frosty (0)

Anonymous Coward | more than 5 years ago | (#27047489)

Maybe, just maybe, because Pentium M wasn't exactly a speed demon to begin with?

EMERGENCY! EMERGENCY! (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27045995)

BARACK OBAMA IS A NIGGER!!

Re:EMERGENCY! EMERGENCY! (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27046961)

Half-nigger, you idiot.

Nice Intel (0, Flamebait)

edivad (1186799) | more than 5 years ago | (#27046005)

So, you close fabs in USA and you make us even more dependent on oversee production. Way to go Intel!

Re:Nice Intel (1)

pak9rabid (1011935) | more than 5 years ago | (#27046043)

Not too surprising given the situation with the economy. I'm sure its far cheaper manufacturing chips overseas than it is here.

Re:Nice Intel (4, Insightful)

vux984 (928602) | more than 5 years ago | (#27046177)

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?

Re:Nice Intel (0)

Anonymous Coward | more than 5 years ago | (#27046233)

Yeah, all those companies moving to production to China are doing it just for the hell of it. ;)

Re:Nice Intel (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27046295)

"Labor costs? I doubt a chip fab is really that sensitive to hourly wages... So sure labor is a bit cheaper, but we're probably talking a labor as fractional cents per cpu... they can afford it."

Companies move production to China because often it is cheaper to produce something with a small army of underpaid manual laborers than to produce it with high-tech machinery.

CPU fabrication is NOT one of those instances. I

Re:Nice Intel (0)

Anonymous Coward | more than 5 years ago | (#27050533)

well, cleaners costs money, environmental safety law cost money, etc etc etc

Re:Nice Intel (2, Informative)

Yarhj (1305397) | more than 5 years ago | (#27046351)

Semiconductor companies have been opening plants in China due to strong government incentive programs. China has been trying to shake the stigma off that "Made in China" sticker by bringing in more R&D and high-tech manufacturing with big corporate tax breaks and other goodies.

I remember reading that the government of one Chinese province was actually paying the majority of the construction costs for a new fab, but I can't remember the Province, or the company which was going to use the fab. I'll try to dig that info up.

Re:Nice Intel (2, Interesting)

WS Tu (1045270) | more than 5 years ago | (#27046399)

hey, at first, TSMC is a company in Taiwan. So as their main factory. And the labor cost is not really a big issue in semiconductor fab. Yield and other issues are more important to them. Intel made good margin on Atom (http://www.electronicsweekly.com/blogs/david-manners-semiconductor-blog/2009/02/intel-to-out-source-atom.html#comment-1439714). Some people think intel is not good at make low power product. Some others think intel want TSMC to help the industry adopt Atom as part of their design.

Re:Nice Intel (3, Informative)

feyhunde (700477) | more than 5 years ago | (#27046495)

TSMC is also known as Wafertech and has a massive fab just across the river from intel's main R&D fabs in Portland. So they are incredibly easy to access.

Re:Nice Intel (3, Informative)

digitalunity (19107) | more than 5 years ago | (#27047929)

Wafertech is a subsidiary of TSMC, so pretty close.

Also, as to reasons Intel might want to move some production to TSMC....

  • TSMC excels at low to medium volume custom ASIC production. This aligns with the Atom business model nicely.
  • Labor dollars are a fractional cost of the price of an Intel chip, but with 401k contributions and healthcare coverage, it certainly does add up.

Feyde is that you?

Re:Nice Intel (1)

treeves (963993) | more than 5 years ago | (#27055785)

and Wafertech is not running a 45nm fab. Try 150nm.

Re:Nice Intel (4, Interesting)

mabhatter654 (561290) | more than 5 years ago | (#27046717)

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.

Re:Nice Intel (1)

i.of.the.storm (907783) | more than 5 years ago | (#27047203)

I would guess land costs and environmental regulation compliance are most likely. Land is probably a lot cheaper elsewhere.

Re:Nice Intel (2, Insightful)

afidel (530433) | more than 5 years ago | (#27048535)

Land, cheaper in TAIWAN?!? I don't think so! This is all about fighting with ARM in the netbook and similar mid market categories. Intel hasn't been hugely successful in making a complete low power solution so turning this IP over to a third party and allowing Atom to become a licensed core will mean there will be single chip low power solutions using Intel designs at their heart. This is good for Intel since there is a real threat that Linux on ARM and company could completely lock Intel out of one of the few sectors that will see significant positive growth in the next couple years.

Re:Nice Intel (1)

i.of.the.storm (907783) | more than 5 years ago | (#27048739)

Ah, right. I was not thinking. And screw Intel, ARM>Atom any day. Order of magnitude lower power consumption, similar performance (which goes to show partly how good ARM is and how bad Atom is), and can be completely fanless. I really hope ARM is successful against Intel on the netbook front, those are what netbooks should have been from the start.

Re:Nice Intel (1)

anss123 (985305) | more than 5 years ago | (#27049977)

similar performance

O RLY. I've looked at benchmarks and Cortex is half the speeds of the already slow Atom. Not impressed.

Re:Nice Intel (1)

i.of.the.storm (907783) | more than 5 years ago | (#27055929)

Source please? I can't find any benchmarks except this one crappy one with a few website page load tests, and it's a few seconds slower or equal on most sites, albeit the Atom is 800mhz and the Cortex is 600. http://www.pocketables.net/2008/10/mid-battle-aigo.html [pocketables.net] But Cortex A8 is supposed to scale up to 1ghz, so I think it could be very competitive. My impressions were based on videos of the Pandora device, which runs a (underclocked) Cortex A8 and seems to run Ubuntu fairly well, and I think the main problem with that is lack of RAM rather than processor speed. A 1ghz Cortex, which is probably what would be in a netbook style device, would be very close to Atom performance wise, and use 1/10th of the power, which is a huge benefit. I'm not sure if you've seen the videos of the ARM netbooks, but they are fanless and make ultraportables look fat.

Re:Nice Intel (1)

Panspechi (948400) | more than 5 years ago | (#27047457)

Maybe because they require more production right now, but can always cut it when needed. This will probably reduce long-term spending for them.

Re:Nice Intel (0)

Anonymous Coward | more than 5 years ago | (#27047461)

Environmental Regs? Well let's see, semiconductor manufacturing uses some of the most toxic chemicals on the planet and in our country we actually enforce a closed loop capture system where all of the chemicals are accounted for going in and coming out of the manufacturing process. I would expect in China they could just dump them into the river behind the fab when they were done with them.

Re:Nice Intel (4, Interesting)

Hal_Porter (817932) | more than 5 years ago | (#27047741)

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 [anandtech.com]
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.

Re:Nice Intel (2, Interesting)

drhank1980 (1225872) | more than 5 years ago | (#27048089)

As someone who works in semiconductors in the USA I would answer your question with its a little bit of all of these.

As for labor in a modern factory there are very few line operators but the TSMC equivenent of my Engineering position gets paid a whole lot less than I do and if your process is complex enough you will still need process and equipment engineers as stuff will always break.

Marerial costs can come down a little bit, especially if your location has really cheap electricity and reasonably clean water nearby.

Environmental compliance is a pretty big item as well. Fabs are basically giant toxic waste dumps the less you need to clean up the acid waste before it goes down the sewer the cheaper it is.

IP is possibly the scariest part for Intel, but TSMC was already offering 45nm products so the node that the Atom is built on is already pretty common in foundries, also TSMC has a very good reputation for building partnerships.

I think you last point is the possibly the biggest reason for Intel's move. An empty fab is a cash sink and TSMC has seen their orders plummit as most of their customers who have their own fabs (that they intend to keep) are canceling their orders with them to keep their own fabs more full even if it costs more to make a wafer in house. When a state of the art Litho Tool cost 50+ Million for one of them, if you bought them you need to keep them running to have a reasonable ROI. And if you close your fab this 50 Million will not fetch anywhere near 5 Million on the open market.

I have heard that even as early as November 08 TSMC was offering to make us wafers for 60% of what we were paying at the time I can only imagine that it has come down even from there.

Re:Nice Intel (0)

Anonymous Coward | more than 5 years ago | (#27049957)

Labor costs always play a huge role. Even with robots, someone has to install them, run them, and fix them.

Re:Nice Intel (1)

pak9rabid (1011935) | more than 5 years ago | (#27051937)

Environmental regulation compliance?

Bingo

Re:Nice Intel (1)

treeves (963993) | more than 5 years ago | (#27055725)

.."is TMSC [sic] hurting for business due to the economic downturn, and is willing to make them dirt cheap, just to keep the factories running...?"

It's probably mainly that, in part,and the fact that Atom chips are too cheap to justify Intel fabs producing them. TSMC is a customer of the company I work for and I've heard they're way down, production-wise.

Re:Nice Intel (1)

Zymergy (803632) | more than 5 years ago | (#27046243)

Not sure, but manufacturing OUTSIDE of the US has advantages, some of these could be: Much lower wages, no heath care benefits, lower taxes, no workman's comp, no EPA, no OSHA, and no FICA to pay... not to mention no/few labor laws and NO UNIONS (in many of these places)...
Ever wonder why so many things are being manufactured in the NOT-USA? Some of these reasons are why. Globalization... (Service-based jobs are here to say.. for now.) Sad but true.

Your ignorance is showing. (5, Informative)

MaWeiTao (908546) | more than 5 years ago | (#27046467)

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.

Re:Your ignorance is showing. (1)

Zymergy (803632) | more than 5 years ago | (#27046669)

Thanks for the good information. Very interesting. My intention was not to take a jab at Taiwan (or to lump it in with China) but to generally state that there are significant advantages for US companies to NOT manufacture stuff (as much) in the US anymore. (I am sure Taiwan has advantages over the US or TSMC would set a fab up in the USA...)
I am sure Intel is doing this because it leads to making more money for Intel. They are very smart.

US companies will save money and have higher profits making many products outside the US. As a proud American is hard to say, but that is the world I observe today.
Other than pets and most food products, I can pretty much correctly assume that most everything else purchasable in US consumer goods stores is made in the NOT-USA.

Re:Your ignorance is showing. (1, Interesting)

Anonymous Coward | more than 5 years ago | (#27047747)

TSMC does have a fab in the US (Washington State) [wikipedia.org] . They also have fabs in China.

TSMC's labor costs are almost nothing. They are a capital intensive company with almost all the money they spend going into equipment, fabs, and R&D (including really fancy scheduling algorithms).

For a variety of reasons, TSMC fabs in Taiwan are the most efficient and have the highest yields. If the US fabs could be as efficient, TSMC wouldn't think twice about building many more there. Again, labor costs are nothing compared to their capital costs, and if US workers could somehow make the US fabs get higher yields, it would be well worth compensating them for it.

Sort of more tangentially, a hidden advantage for Taiwan is the clustering effect of the semiconductor industry in Taiwan. With a cluster, information moves around much more rapidly, it's easy to find good workers, you get a lot of very specialized, very good companies with top service that dominate their particular sector; it's all the same advantages that Silicon Valley has had in the IT industry (and possibly will also have with biotech and green tech).

Hsinchu is the big semiconductor cluster with everything from wafers to fabs to design houses. There are other clusters in other parts of the island as well (precision tools, high end bicycles, solar panels, LCD panels, super yachts, etc).

Re:Your ignorance is showing. (1)

cclee (1483741) | more than 5 years ago | (#27046811)

Taiwan companies do have their own brands, don't they? As far as I know, there's BenQ, Asus...

Re:Your ignorance is showing. (2, Insightful)

c.r.o.c.o (123083) | more than 5 years ago | (#27047035)

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.

I know I'll open a can of worms for saying this, but the Bush administration had 8 years of mostly positive economic growth to address this situation. Instead they chose to invest in other, less profitable ventures, like the war in Iraq. Obama is faced with the worst recession in recent times, unemployment at 7.6% if you don't count discouraged workers, a housing market that is dead, a financial sector that is about to collapse and a budget deficit that is in the trillions. Cutting corporate taxes, which are already lower compared to most other countries would be counterproductive.

As history has shown, those companies will still move their manufacturing to China, will still outsource their IT to India, and will still downsize, while paying lower taxes on their profits. The only way lower corporate taxes would work is if they were tied to certain conditions, like requiring the manufacturing and support services to be located in the US in order to qualify for them.

Re:Your ignorance is showing. (2, Interesting)

PapayaSF (721268) | more than 5 years ago | (#27048375)

Cutting corporate taxes, which are already lower compared to most other countries

Where do you get that idea? The average combined federal and state corporate tax rate in the U.S. is 39.3 percent, second among OECD countries to Japan's combined rate of 39.5 percent [taxfoundation.org] .

Re:Your ignorance is showing. (1)

bjourne (1034822) | more than 5 years ago | (#27049289)

While it is true that the US does not have the lowest corporate tax, the total tax burden for American companies are lower than most other Western countries. The higher corporate tax is offset by lower taxes on wages. You can find "statistics" from lobbying organisations with names like Tax Foundation for basically any industrialized country proclaiming that they have the highest taxes in the world. Generally these organisations have been very successful in their propaganda which is why Americans think they have the worst taxes, Danish think they have the worst, Swedes, Germans, French, Norweigans, Japanese and Italians think it too.

Re:Your ignorance is showing. (0)

Anonymous Coward | more than 5 years ago | (#27047251)

This is another typical problem in the USA of American companies selling out to foreigners and putting more Americans out of work. Watch for the next layoff from Intel that will probably happen within 90 days from the time TSMC takes over the manufacturing of these chips.

From a local business owner in a small community thats already struggling

Re:Your ignorance is showing. (1)

dunkelfalke (91624) | more than 5 years ago | (#27049421)

The key distinction is that quality is guaranteed and the companies are more trustworthy.

ha! like pcchips with their fake cache and fake vx pro mainboards.

Re:Your ignorance is showing. (2, Insightful)

Tweenk (1274968) | more than 5 years ago | (#27049691)

Of course, the Taiwanese government bureaucracy is at fault for doing a piss poor job of marketing their own country in every way.

Doesn't this have SOMETHING to do with the fact that China is very unhappy about Taiwan's existence as an autonomous entity, and doing everything they can to subjugate them?

Re:Nice Intel (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27046057)

Shut the fuck up you stupid faggot.

Re:Nice Intel (0)

Anonymous Coward | more than 5 years ago | (#27047425)

you need to take your Apple IIe and you serial connected 14baud modem and lear to speak properly when you are online. and the same goes with your boy-toy that made the KKK remarks below

Re:Nice Intel (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#27046081)

Why are you racist against chinks you fucking KKK piece of shit?

Re:Nice Intel (3, Informative)

macraig (621737) | more than 5 years ago | (#27046093)

Did you read or just fire from the hip? I think you're inferring a fact not in evidence; no fab closure was mentioned in the ARSTechnica report about this. In fact, it was stressed that this was an agreement for fabbing projects in addition to what both companies had independent of each other.

Re:Nice Intel (1)

Lifyre (960576) | more than 5 years ago | (#27046281)

You must be new here. Expecting people to RTFA....

Re:Nice Intel (1)

macraig (621737) | more than 5 years ago | (#27046439)

I only expect him to RTFA if he thinks he has something to say about the matter... if he doesn't, then he can skim and delete to his heart's contentment. That's not to say I expect him to spend a week researching the topic and become an EXPERT... life is (or should be) a collective learning process for us all, and we all make wrong conclusions now and then. Nevertheless there is such a thing as due diligence, and I think that R'ingTFA upon which one feels compelled to comment is a bare minimum of diligence, n'est-ce pas? :-)

Re:Nice Intel (0)

Anonymous Coward | more than 5 years ago | (#27046695)

I only expect him to RTFA if he thinks he has something to say about the matter... if he doesn't, then he can skim and delete to his heart's contentment. That's not to say I expect him to spend a week researching the topic and become an EXPERT... life is (or should be) a collective learning process for us all, and we all make wrong conclusions now and then. Nevertheless there is such a thing as due diligence, and I think that R'ingTFA upon which one feels compelled to comment is a bare minimum of diligence, n'est-ce pas? :-)

As the tag I have seen many times says goodluckwiththat...

Re:Nice Intel (4, Interesting)

Chabo (880571) | more than 5 years ago | (#27046169)

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.

Re:Nice Intel (2, Informative)

_avs_007 (459738) | more than 5 years ago | (#27047043)

In addition, the fabs that were closed are not compatible with the process that makes the Atom... So that means outsourcing to TSMC is not costing any US jobs, especially when you consider what markets Intel is trying to go after with this. (ie, markets they are not currently in)

And FWIW, not all TSMC operations are overseas. There is a TSMC fab in the Portland metro area.

Re:Nice Intel (3, Insightful)

Teckla (630646) | more than 5 years ago | (#27047113)

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.

Picking up your life and your family's life and moving involves, for many or most people, selling their house, which is insanely difficult or involves selling at a very low price in the current economic crisis.

Intel executives likely realize this, and realize many people will have little choice but to not accept a position at a different fab. However, isn't it so nice for Intel executives that they get to make it look like they're purely good guys?

Re:Nice Intel (2, Informative)

Chabo (880571) | more than 5 years ago | (#27047287)

I'm relatively new at Intel, but it seems to me that the employees knew this was coming eventually, regardless of economic conditions.

Intel tends to use a fab for several years, until that process technology has become outdated. At that point, they close down the fab, selling it off about half the time, and starting the long task of re-tasking the fab for a smaller process the other half. The fabs being closed in this case are all on a process greater than 100nm -- remember that with the Prescott, launched in early 2004, Intel moved the P4 from 130nm to 90nm.

This isn't like GM closing down a factory, this is more like a school building a new facility because their old one asbestos, and old wiring. They could just renovate the current building, but it would be easier and less costly to make a whole new building, even if that means Timmy can't walk to school anymore.

Re:Nice Intel (0)

Anonymous Coward | more than 5 years ago | (#27049643)

Timmy can't walk to school? How sad!

Re:Nice Intel (1)

Nick Ives (317) | more than 5 years ago | (#27048485)

Picking up your life and your family's life and moving involves, for many or most people, selling their house, which is insanely difficult or involves selling at a very low price in the current economic crisis.

If you work for Intel then surely this is something you should plan for? I'm a dyed in the wool Socialist (and so obviously think Intel should have some sort of relocation allowance scheme) but am still OK with this. Even though I don't work there I know about how they shut down / retool fabs etc (as Chabo mentions below), I'd imagine they make the effort to tell prospective employees directly before they join.

Re:Nice Intel (1)

mgblst (80109) | more than 5 years ago | (#27049447)

Are these fabs in china or india?

Re:Nice Intel (0)

Anonymous Coward | more than 5 years ago | (#27051761)

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.

I work for Intel too, and I am one of the employees at the Santa Clara D2 fab that is closing. We are not all being offered jobs at other fabs, even if we want to move. Oh, there are a few openings, including one-way tickets to the Dalian China Fab 68, (at Chinese level wages) but most of us are on our own as far as looking for work. There are significant resources available to help with the job search, but in the end Intel is reducing headcount.

The D2 factory in Santa Clara (the largest fab left in Silicon Valley but the smallest at Intel) was developing and running 65nm and smaller NOR Flash processes up until a year ago. The technology was spun off to Numonyx, and they decided to keep one R&D fab in Italy (ST Micro's R2. Yes R2 and D2. R2 won.) At literally the last minute before closing in June 2008, they announced that the Atom chipset demand could not be met without D2. We had a new one year extension. Come January, as the products were ready to ramp: "Business conditions being what they are, we don't need the extra capacity." Now we are closing again, for good it looks like. Not a complete closure, just a minimal cost "safe state" or mothball activity, in case they find buyers for the 200mm process equipment. To be fair, we will have over 4 months from the announcement, to the "release date" of 5/30, then a one month transition period happens when one can leave with a (decent for long timers) separation package, or go into an 8 week redeployment pool.

The internal memo emphasized that TSMC offered additional IP that Intel doesn't have, so customers can order specialized versions of the Atom as SOCs. The "old fabs" were not able to offer these to customers, but I am sure they also looked at the cost of using TSMC compared to the relatively high cost of doing manufacturing in Silicon Valley and other 200mm fabs. (BTW: The major cost driver is depreciation, not labor, and economies of scale are big factors of tool utilization.)

They also confirmed that Intel is not giving TSMC the High-K 45 and 32nm processes, but tweaking the Atom design to run on TSMC's process, thus protecting that IP. It also allows TSMC to ramp faster.

Personally, (I don't speak for my employer) I think the primary motivation is to try to offer everything to the MID/phone/set top box/netbook suppliers that they could get with ARM. A playing field leveling if you will. Intel doesn't have all the bits and pieces that the customers want, so by adding IP from TSMC to Atom, they can offer more choices, at foundry prices. This may help speed the acceptance of the Atom as a real competitor to ARM in the really low power applications.

Re:Nice Intel (5, Interesting)

Yarhj (1305397) | more than 5 years ago | (#27046249)

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)

Re:Nice Intel (1)

Alinabi (464689) | more than 5 years ago | (#27046265)

Would you buy an Atom CPU that costs 5x what it costs now?

Re:Nice Intel (1)

wonderboss (952111) | more than 5 years ago | (#27046341)

I suspect that this move has nothing to do with cost reduction or moving jobs overseas. Intel(microprocessors) and TSMC operate in different markets. This is a way for Intel to compete with ARM (and others) in the embedded space to prevent ARM from eating them up from below via mobile applications. There are parts of Intel that make things other than microprocessors. I think you might find that they have used non-Intel fabs for some time. Personally I can't wait to get my Atom and NVidia GeForce 9400 on one chip.

Re:Nice Intel (1)

ckaminski (82854) | more than 5 years ago | (#27047503)

Umm... didn't Intel own ARM for a while? Sometime around the StrongARM days? And ended up being rebranded Xscale, and which was killed off for Atom?

Am I remembering history wrong?

Re:Nice Intel (0)

Anonymous Coward | more than 5 years ago | (#27048183)

They owned a company that had an ARM license.

Re:Nice Intel (1)

wonderboss (952111) | more than 5 years ago | (#27048433)

I think Intel acquired the rights to StrongARM by acquiring a company.

Re:Nice Intel (1, Informative)

Anonymous Coward | more than 5 years ago | (#27048481)

When DEC was bought out, Intel acquired StrongARM from Compaq. It was supposed to be really good, but it never really worked out for them. They later sold it off. I assume they made a profit, but there wasn't a culture around alternative instruction sets. That was a few years ago, so Atom is their attempt to re-enter the market.

They really don't want Atoms in desktops, do they? (0)

Anonymous Coward | more than 5 years ago | (#27046029)

The desktop CPU and its high profit margins is dying.

Re:They really don't want Atoms in desktops, do th (2, Insightful)

sexconker (1179573) | more than 5 years ago | (#27046197)

Still awaiting (stock) 4 GHz CPUs.

Re:They really don't want Atoms in desktops, do th (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27046575)

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).

Re:They really don't want Atoms in desktops, do th (1)

toddestan (632714) | more than 5 years ago | (#27047863)

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.

Re:They really don't want Atoms in desktops, do th (0)

Anonymous Coward | more than 5 years ago | (#27048453)

If you got the money:

http://en.wikipedia.org/wiki/POWER6 [wikipedia.org]

It was released on the 8th June 2007, at speeds of 3.5 GHz, 4.2 GHz and 4.7 GHz[2], but the company has noted prototypes have reached 6 GHz.[3] POWER6 reached first silicon in the middle of 2005[4], and bumped to 5.0 GHz in May 2008.[5]

Re:They really don't want Atoms in desktops, do th (1)

0123456 (636235) | more than 5 years ago | (#27047257)

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.

Re:They really don't want Atoms in desktops, do th (2, Informative)

tlhIngan (30335) | more than 5 years ago | (#27048075)

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.

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 [arstechnica.com]

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.

Re:They really don't want Atoms in desktops, do th (0)

Anonymous Coward | more than 5 years ago | (#27048629)

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.

Stock (1)

Rinisari (521266) | more than 5 years ago | (#27046041)

This news did some interesting things to TSMC's stock today.

http://www.google.com/finance?q=NYSE:TSM [google.com]

It shot up to ~$7.82 in very early trading, but closed down 1.19% at $7.45.

TSMC using Intel's HKMG 45nm process? (1)

Zymergy (803632) | more than 5 years ago | (#27046049)

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)?

Re:TSMC using Intel's HKMG 45nm process? (2, Informative)

Ninnle Labs, LLC (1486095) | more than 5 years ago | (#27046131)

Neither company has revealed which manufacturing technology will be used to make the Atom chips, but Maloney hinted that the CPUs would be built on a 32nm process, saying that "both companies have a sense of urgency, and both companies want to make things as advanced as they can."

Re:TSMC using Intel's HKMG 45nm process? (0)

Anonymous Coward | more than 5 years ago | (#27046137)

FTFA:

Neither company has revealed which manufacturing technology will be used to make the Atom chips, but Maloney hinted that the CPUs would be built on a 32nm process,

Re:TSMC using Intel's HKMG 45nm process? (2, Interesting)

frieko (855745) | more than 5 years ago | (#27046443)

"The TSMC 45nm process combines the most advanced 193nm immersion photolithography, performance-enhancing silicon strains, and extreme low-k (ELK) inter-metal dielectric material to bring both performance and reliability to advanced technology designs."

sauce [tsmc.com]

Re:TSMC using Intel's HKMG 45nm process? (1)

frieko (855745) | more than 5 years ago | (#27046475)

parent here. nevermind, they're talking about the dielectric between wires, not transistor dielectric.

THANKS FOR FIXING THE RSS (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#27046105)

i tried emailing cmdrtaco this morning and got no response...

Long time coming (2, Interesting)

Anonymous Coward | more than 5 years ago | (#27046315)

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.

Re:Long time coming (0)

Anonymous Coward | more than 5 years ago | (#27049239)

Dude, you're talking BS. TSMCs process is completely different from Intel's own, so the TSMC Atoms would most likely have different characteristics, Intel has more than enough manifacturing capabilities for Atom, and this deal has nothing to do with outsourcing. So unless you present some evidence for those absurd claims of yours, you better cut the crap

Re:Long time coming (1)

dunkelfalke (91624) | more than 5 years ago | (#27049383)

cpus are not the only thing that intel makes. there are also chipsets, networking chips and so on.
it is possible, that they are second sourced from other fabs.

I have a bad feeling about this (3, Interesting)

SpazmodeusG (1334705) | more than 5 years ago | (#27046327)

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 [wikipedia.org]

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.

Re:I have a bad feeling about this (2, Informative)

zaft (597194) | more than 5 years ago | (#27046769)

The press I have seen specifically said that Intel was NOT licensing any of its process technology.

Another move to mess with AMD (3, Interesting)

John Jamieson (890438) | more than 5 years ago | (#27046423)

Intel does not need any fabbing capacity. What they do like is to mess with AMD partners.

Let the games begin.

Re:Another move to mess with AMD (1)

Nick Ives (317) | more than 5 years ago | (#27048483)

If they don't need the capacity then they're gonna end up with lots of useless Atoms. I remember a game company here in the UK bought up all the tape copying duplication facilities they could in the run-up to Christmas back in the 80s just to mess with their competitors; it was one of the decisions that lead to their eventual bankruptcy (not piracy as one of the former directors still likes to claim).

Nope - pre-empting RISC ASICs (0)

Anonymous Coward | more than 5 years ago | (#27048603)

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.

Nothing exciting to see here (3, Interesting)

Ritz_Just_Ritz (883997) | more than 5 years ago | (#27046895)

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,

Re:Nothing exciting to see here (1)

caladine (1290184) | more than 5 years ago | (#27047913)

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,

Seems to me this is the likely reason, in addition to this from the summary

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.

ARM-based products are the major competition with Atom in the up and coming smaller device market. If they want other OEMs to use Atom, they'd have to do something like this, or make them themselves. Given the current economy, this gives all the more weight to the "using TSMC as possible additional manufacturing capacity".

Re:Nothing exciting to see here (0)

Anonymous Coward | more than 5 years ago | (#27049199)

The headline is highly misleading. This has nothing to do with outsourcing, this is all about licensing the Atom core to third parties. Intel will still produce their own atom chips in-house, and the atom roadmap doesn't change either.

Fab closure? (0)

Anonymous Coward | more than 5 years ago | (#27047501)

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.

Re:Fab closure? (1)

Klintus Fang (988910) | more than 5 years ago | (#27049097)

Intel closed some very old fabs that were using process technologies that were very out-dated. Those FAB closures were all over the globe, not in the US. As other has said, that was inevitable. The economic downturn hastened it a bit, but it was going to happen anyway. That is always what happens to really old fabs.

But another thing that Intel has announced that it is doing at the same time is spend 7 billion dollars upgrading their state of the art FABs in Oregon, Arizon, and New Mexico; the fabs that manufacture the profitable high-end chips using the latest process technologies.

They hastened the closure of the older fabs that were in the process of closing down anyway, but appear to be doubling down in investment in their high end fabs rather than closing anything important.

This deal with TSMC isn't about fab closure at all. It's about how they want to strategically position the atom processor relative to the competition in the low margin market segments.

wtfisanettop? (1)

nicodoggie (1228876) | more than 5 years ago | (#27047541)

Not good. [xkcd.com]

Re:wtfisanettop? (0)

Anonymous Coward | more than 5 years ago | (#27047935)

It's the 2000's answer to an x terminal.

Intel (1)

Zork the Almighty (599344) | more than 5 years ago | (#27047567)

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.

Re:Intel (2, Insightful)

toddestan (632714) | more than 5 years ago | (#27047943)

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.

Why do you think they are a fad? They obviously aren't going to be much use for what you do, but the vast majority of people can do what they want to do with with fairly low powered hardware. For them, a cheap Atom-based computer may be hard to pass up. The Atom 330 is a dual core 1.6Ghz processor with Hyperthreading. That's a fairly respectable amount of power for a computer used for browsing the internet, viewing photos, and managing a music collection. You can buy an Atom 330 CPU/board combo for $80 by the way.

Re:Intel (2, Insightful)

MBGMorden (803437) | more than 5 years ago | (#27051057)

The Atom 330 is a dual core 1.6Ghz processor with Hyperthreading. That's a fairly respectable amount of power for a computer used for browsing the internet, viewing photos, and managing a music collection. You can buy an Atom 330 CPU/board combo for $80 by the way.

The megahertz myth is important here though. A 1.6Ghz Core2 Duo based chip - very powerful for most user's needs. A 1.6Ghz Atom (even dual core) - not so much. When comparing single cores the Atom doesn't even stack up Mhz to Mhz to the Via chips.

Then compare: for about $90 you can get a dual core 1.6ghz Celeron chip based on the Core 2 Duo architecture that will smoke a 1.6ghz Atom in performance terribly.

Basically, the low-low end of standard desktop components is on parity in price to the high end Atom chips, but still is leaps and bounds ahead in performance. The main area where the Atom shines is power consumption - but even in that it's close enough that for desktop use, the faster chip is still not doing that badly. Dropping to Atom performance is really only worth it if you plan on running on batteries for a significant chunk of time.

I still personally see Atom as a mobile chip. Mobile devices are gaining in popularity, but the desktop is still here and likely will be on some level for the foreseeable future.

Re:Intel (1)

Microlith (54737) | more than 5 years ago | (#27048239)

Atom isn't a fad, so much as it's the initial phases of an assault on ARM's territory, which they've had locked down for some time now.

Netbooks and MIDs are just the first phase of its rollout. Intel isn't so concerned about the Atom eating the netbook/low-end laptop market up (since at this point it'll just run the Celeron out of the market) so much as encroaching on Core2/Core i7 territory. As a result, they've got large restrictions on what you can make with Atoms before they'll sell them to you (if you see screen sizes beyond 12" for any portable or any type of internal expandability on a desktop based on an Atom it'll be too soon.)

What Intel hopes to do with the subsidizing of Atom this way is shrink the process, refine the design, and eventually get low power and low voltage enough with the dual core design that they can face off with ARM in the embedded and wireless markets.

With partners like TSMC (1)

sethstorm (512897) | more than 5 years ago | (#27048579)

It will only be a matter of time before the knockoffs come marching in.

Intel does NOT recruit TSMC to produce Atom CPUs (0)

Anonymous Coward | more than 5 years ago | (#27049301)

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.

Intel-TSMC Deal is All About Customization (1)

Catalina588 (1151475) | more than 5 years ago | (#27051187)

These threads are wandering all over the place and getting away from the obvious: Intel's Atom will be a widely used processor for the next decade and beyond, so Intel needs to make Atom available in ways that Intel itself would not want to manufacture.

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".

Not the first time. (1)

Locke2005 (849178) | more than 5 years ago | (#27054743)

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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