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It could just be that Intel wants to increase their stock price and sees low hanging fruit for expanding revenue and net income in the foundry business which do
by wtvanhest 15y ago
It could just be that Intel wants to increase their stock price and sees low hanging fruit for expanding revenue and net income in the foundry business which does not damage any of their other competitive positions.
They have ramped up capacity recently and it is beneficial to them to fill that capacity rather than shut it down if they can add some revenue.
Later if they need that capacity for higher margin products like some x86 phone processor that none of us know about Intel can end their agreements with the fabless semiconductor companies and produce their own.
- ajross 15y agoIt still competes with their CPU business if it takes fab capacity they could otherwise use for (much higher margin!) CPUs. I suspect, as the linked article posits, this is a hedge. They want to maintain the capability to do on-contract fab work, so partnering with a handful of small volume firms (who can be purchased if it turns out they are successful) makes sense. Intel won't be hooking up with a big ARM SoC designer any time soon.
- wtvanhest 15y agoYes, if there is a market for their higher end CPU business then that would make sense, but presumably they would be using those fabs for that business if they thought there was a market for those units at this point. I'm saying that Intel may think that the market size for computer processors will continue to grow and this would be space they could fill if necessarily. Realistically though, they would probably just build more fabs.
- ajross 15y agoThey are using them for that business. Intel's fabs are at capacity, and they're building a new giant one in Oregon right now.