Intel set to form new partnership with TSMC

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Intel set to form new partnership with TSMC

Intel and Taiwan Semiconductor Manufacturing Co. will be announcing a "strategic partnership" at a US event this week.

The press who have been invited to attend report that TSMC representatives will include chief executive Rick Tsai and the vice president of sales and marketing, Jason Chen, while Intel's will include Ultra Mobility Group general manager, Anand Chandrasekher and chief executive of sales and marketing officer, Sean Maloney.

Media reports are speculating on the type of collaboration the two giant chip manufacturers will announce.

Until now Intel has mainly manufactured its own chips while many of Intel's competitors have outsourced the work to TSMC.

But with the economic downturn, Intel has had a difficult start to the year, cutting prices on chips, closing four chip plants and cutting headcount by around 6000 jobs, and the new partnership could be in the form of a chip manufacturing outsourcing agreement.

If this is the case, it would be following a similar decision taken by AMD, which recently became purely a chip-design company, contracting chip manufacturing operations to The Foundry Company, a new enterprise that is run by the Advanced Technology Investment Company using AMD's manufacturing assets.

However Intel only recently announced it will build seven billion dollars worth of new chip manufacturing plans and it has always promoted the competitive edge it has gained from running its own manufacturing operations; it moved from a 65-nanometer chip to 45-nanometer and plans a 32-nanometer later this year.

More likely is the presumption taken by financial publication Barron's that suggests Intel and TSMC will launch a new deal in NAND flash, following an earlier report in Electronics Weekly that quoted Intel chief executive, Paul Otellini, unveiling Intel's plans to develop Atom-based chip-sets in smartphones.

"It may not be essential for us to have our own NAND factories to build," Otellini was reported to have said at the Goldman Sachs Technology and Internet Conference 2009.

The fact that Chandrasekher is attending the Monday event is a good indication the partnership will be a business model for developing NAND.

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