Intel would consider making custom chips for major customers like Apple

Posted:
in Future Apple Hardware edited January 2014
An executive with chipmaker Intel said on Thursday that his company "wouldn't blink" if given the opportunity to build a custom chip based on the Intel architecture for a major client like Apple.



Intel Chief Financial Officer Stacy Smith made the comments on Thursday at an investor event in London. According to Reuters, he said his company would be happy to produce custom chips based on Intel's own architecture, though they would be less willing to allow rival architectures, like ARM, in their plants.



"If Apple or Sony came to us and said 'I want to do a product that involves your IA (Intel architecture) core and put some of my IP around it,' I wouldn't blink," he reportedly said. "That would be fantastic business for us."



He said for chips not based on the Intel architecture, and for custom-designed cores like the A5 processor found in Apple's iPad 2, his company's only financial gain would be the manufacturing margin. In that case, he said Intel would need to engage in "a much more in-depth discussion and analysis," though he did not entirely rule out the possibility.



Smith went on to say that Intel has made some "tiny" foundry deals in the last year, largely to access new technology. However, proposals from major device makers like Apple are not yet in the works.



He also said the prospect of making chips for others was not the driving force behind Intel's continuing investments in capacity. But the comments make it clear that Intel would jump at the chance to work with Apple on custom processors based on the Intel architecture for systems such as Mac computers.







As for the ARM-based processors Apple uses in its mobile devices, a report from earlier this month claimed that Intel has shown interest in building chips like the custom A4 and A5 to compete against foundries like Samsung. Intel currently makes the CPUs that power its notebook and desktop Mac lineup, but has turned to ARM processors for devices including the iPhone, iPad, iPod touch and Apple TV.



Intel worked with Apple in creating the new high-speed Thunderbolt port found on the latest MacBook Pros and iMacs. It was Apple's close involvement in the project that gave the Cupertino, Calif., company first access to the next-generation technology.
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Comments

  • Reply 1 of 36
    mdriftmeyermdriftmeyer Posts: 7,100member
    Quote:
    Originally Posted by 5waltersm1 View Post


    sometimes it surprises me how much companies like apple affect companies like Intel as they are both massive companies neither which 'struggling' but i suppose any company will jump at the opportunity for more profit



    Intel realizes about 2 years too late that it's out-of-the-loop on the single largest profit focus--smartphones and tablets.



    ARM is only going to advance it's positions it currently dominates and take on more of Intel's traditional markets.



    Apple doesn't give a rat's behind what Intel would offer. In the embedded space Apple has billions invested and it controls the IP and there are several foundries that can meet their demand, even if Samsung gets dropped.
  • Reply 2 of 36
    magicjmagicj Posts: 406member
    Quote:
    Originally Posted by AppleInsider View Post


    "If Apple or Sony came to us and said 'I want to do a product that involves your IA (Intel architecture) core and put some of my IP around it,' I wouldn't blink," he reportedly said. "That would be fantastic business for us."



    I think Apple uses Intel chips on the Mac line so that users can boot into Windows. So that would seem to make the need for custom chips less likely.



    On their iPhone and iPad, Apple uses ARM because of their low power consumption compared to Intel. So that would seem to make the need for Intel chips less likely.



    Not seeing a spot where it makes sense for Apple to use custom Intel chips.
  • Reply 3 of 36
    foobarfoobar Posts: 102member
    The problem is: Nobody wants IA chips in the post-PC devices. Not even custom-made ones.



    Now, an Intel-manufactured chip with ARM architecture. That would be very yummy...
  • Reply 4 of 36
    bedouinbedouin Posts: 331member
    Would be nice for Macs to have their own architecture again and end the Hackintoshs.
  • Reply 5 of 36
    benny-boybenny-boy Posts: 88member
    Quote:
    Originally Posted by bedouin View Post


    Would be nice for Macs to have their own architecture again and end the Hackintoshs.



    Really? I don't own a Hackintosh but this intel thing has been awesome for Apple.
  • Reply 6 of 36
    Isn't it interesting that Intel's biggest strength in the desktop market, backwards Windows compatibility, is its biggest weakness in the mobile market? I have been openly speculating about what the performance and power usage of an Arm processor would be like if it were made with Intel's latest fab process.



    If I was Intel, I would move mountains to purchase Arm. Intel needs to be in the leading position of CPU design. They are very good at it. Unfortunately they are being held back by the need for backwards compatibility and their CISC architecture. Even Microsoft seems to be less interested in backwards compatibility these days with their announcement of an Arm version of Windows. As an individual user, backwards compatibility is not very important now that I can buy new apps for a few dollars.



    Wintel has finally run its course. I see it becoming less and less important compared to mobile, embedded and cloud computing processors.
  • Reply 7 of 36
    bcahill009bcahill009 Posts: 163member
    Quote:
    Originally Posted by bedouin View Post


    Would be nice for Macs to have their own architecture again and end the Hackintoshs.



    If you can't comment on the article at least use complete sentences and/or try not sounding like a whinny moron.



    Thanks.
  • Reply 8 of 36
    melgrossmelgross Posts: 30,310member
    I can understand Intel not being too interested in doing foundry work for others if the production was small. Small being on the order of hundreds of thousands to in the low millions. Then the profit would be small. as they mentioned.



    But, Apple will need a good 200 million chips in 2012. Being that these are all the same chips, except for the speed sort that Apple uses, running the iPhone slightly slower than the iPad, and possibly the Touch, Intel would benefit from the enormous production run. Intel doesn't make more than a fraction of that number of any of its own chips. And as efficiency increases in chip production the further down the road you get with a chip, they would have increasing profits as the year went on.



    The estimate is that Apple is paying about $25 per A%, as opposed to a cost of $15 for the Tegra 2. 200 million of those chips, if Apple paid intel what they pay Samsung, would be $5 billion dollars. That's a significant portion of their total sales, which last year was $43.6 billion.
  • Reply 9 of 36
    bcahill009bcahill009 Posts: 163member
    Intel saying this can only be seen as a positive for Apple moving forward. They either work out a deal with Intel that is better for them, or they get a better price from their current chip maker in fear that they will leave for Intel.



    As has become standard over the last couple of years Apple holds most of the cards sitting at the negotiating table.
  • Reply 10 of 36
    Sure, anything for the famlly jewels.
  • Reply 11 of 36
    xsamplexxsamplex Posts: 214member
    The margins on fab are nothing compared to the margins on chips housing your own intellectual property. Intel's position is that of a fully rational capitalist.
  • Reply 12 of 36
    mdriftmeyermdriftmeyer Posts: 7,100member
    Quote:
    Originally Posted by GrangerFX View Post


    Isn't it interesting that Intel's biggest strength in the desktop market, backwards Windows compatibility, is its biggest weakness in the mobile market? I have been openly speculating about what the performance and power usage of an Arm processor would be like if it were made with Intel's latest fab process.



    If I was Intel, I would move mountains to purchase Arm. Intel needs to be in the leading position of CPU design. They are very good at it. Unfortunately they are being held back by the need for backwards compatibility and their CISC architecture. Even Microsoft seems to be less interested in backwards compatibility these days with their announcement of an Arm version of Windows. As an individual user, backwards compatibility is not very important now that I can buy new apps for a few dollars.



    Wintel has finally run its course. I see it becoming less and less important compared to mobile, embedded and cloud computing processors.



    Apple and several others own a nice amount of ARM.
  • Reply 13 of 36
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by mdriftmeyer View Post


    Intel realizes about 2 years too late that it's out-of-the-loop on the single largest profit focus--smartphones and tablets.



    I agree that ARM will continue to gain massive traction but I?m not so sure about it being the single largest profit focus from Intel?s PoV. ARM Holding made $665.5 million in 2010 while Intel made 43.6 billion. I don?t know the revenue or profit from the foundries that make the chips but I can?t imagine that they would amount to single largest profit focus for sometime to come.
  • Reply 14 of 36
    tbelltbell Posts: 3,146member
    That and Apple by using Intel doesn't have to worry about a non-Intel based supplier falling behind in performance (or the appearance of falling behind). Intel chips also were cheaper then what Apple was paying for a IBM or Motorola supplied processor. Apple doesn't have to foot part of the development cost.



    It would be good for Apple though if it could reduce its reliance on Samsung. It would also be nice to bring some jobs back to the US, which having Intel build the chips probably would do.



    Quote:
    Originally Posted by magicj View Post


    I think Apple uses Intel chips on the Mac line so that users can boot into Windows. So that would seem to make the need for custom chips less likely.



    On their iPhone and iPad, Apple uses ARM because of their low power consumption compared to Intel. So that would seem to make the need for Intel chips less likely.



    Not seeing a spot where it makes sense for Apple to use custom Intel chips.



  • Reply 15 of 36
    mdriftmeyermdriftmeyer Posts: 7,100member
    Quote:
    Originally Posted by melgross View Post


    I can understand Intel not being too interested in doing foundry work for others if the production was small. Small being on the order of hundreds of thousands to in the low millions. Then the profit would be small. as they mentioned.



    But, Apple will need a good 200 million chips in 2012. Being that these are all the same chips, except for the speed sort that Apple uses, running the iPhone slightly slower than the iPad, and possibly the Touch, Intel would benefit from the enormous production run. Intel doesn't make more than a fraction of that number of any of its own chips. And as efficiency increases in chip production the further down the road you get with a chip, they would have increasing profits as the year went on.



    The estimate is that Apple is paying about $25 per A%, as opposed to a cost of $15 for the Tegra 2. 200 million of those chips, if Apple paid intel what they pay Samsung, would be $5 billion dollars. That's a significant portion of their total sales, which last year was $43.6 billion.



    ARM is RISC and Apple's investment into it is not scaling back, but expanding. I like how you fix priced the Apple price for their SoC CPU combo. Sorry, but volume increases dramatically reduce the price to the buyer.



    LLVM Project's Clang subproject just added assembly support for Cortex-A{8,9,15}, Cortex-R{4,5,7}, Cortex-M{0,3,4}, ARM11MPCore, ARM1176 in the general Clang tree.



    They also just added SSE42_64 CodeGen support into LLVM.



    LLVM 3.0 is truly shaping up to being the big break from GCC.
  • Reply 16 of 36
    mdriftmeyermdriftmeyer Posts: 7,100member
    Quote:
    Originally Posted by TBell View Post


    That and Apple by using Intel doesn't have to worry about a non-Intel based supplier falling behind in performance (or the appearance of falling behind). Intel chips also were cheaper then what Apple was paying for a IBM or Motorola supplied processor. Apple doesn't have to foot part of the development cost.



    It would be good for Apple though if it could reduce its reliance on Samsung. It would also be nice to bring some jobs back to the US, which having Intel build the chips probably would do.



    Intel is the one behind. They are severely behind Apple's A# Series SoC.



    Sorry, but Apple's not abandoning the overwhelming amount of recently granted IP for Intel.
  • Reply 17 of 36
    tbelltbell Posts: 3,146member
    It is clear you know the difference, but I think it is important to clarify neither Intel or ARM "made" the numbers you report. To me, "made" implies profit. The numbers you are using are gross revenue. That is what Intel and ARM brought in.



    The profit for the year for Intel, however, was 4.4 Billion. About a tenth of gross revenue. Arms Holding's profit for the year was about 274 million. Closer to half its gross revenue. So comparatively speaking, ARM keeps a much higher percentage of the gross revenue as actual profit (or spends much less to make its profit).



    ARM's number will likely only go up as companies like Microsoft start switching to ARM. Intel as a back plan should seriously start building its foundry business. It would be a win win for Intel and companies like Apple who are looking to escape Samsung.



    Quote:
    Originally Posted by solipsism View Post


    I agree that ARM will continue to gain massive traction but I?m not so sure about it being the single largest profit focus from Intel?s PoV. ARM Holding made $665.5 million in 2010 while Intel made 43.6 billion. I don?t know the revenue or profit from the foundries that make the chips but I can?t imagine that they would amount to single largest profit focus for sometime to come.



  • Reply 18 of 36
    mdriftmeyermdriftmeyer Posts: 7,100member
    Quote:
    Originally Posted by solipsism View Post


    I agree that ARM will continue to gain massive traction but I?m not so sure about it being the single largest profit focus from Intel?s PoV. ARM Holding made $665.5 million in 2010 while Intel made 43.6 billion. I don?t know the revenue or profit from the foundries that make the chips but I can?t imagine that they would amount to single largest profit focus for sometime to come.



    Who said anything about ARM Holdings. I'm talking about the ARM based CPUs in deployment and the massive revenues made from them.



    Apple will have > $100 Billion in 2011 revenues. How much comes from the Embedded Space? Take a guess.
  • Reply 19 of 36
    tbelltbell Posts: 3,146member
    My post probably wasn't clear, but I was referring to Intel's chips used in PCs and Macs not the chips Intel wants to be used in mobile devices.



    Apple probably would benefit though if it could make a deal with Intel to build Apple's ARM chips. Currently, Samsung is stealing a good chunk of Apple's efforts and using it in its own products.



    Quote:
    Originally Posted by mdriftmeyer View Post


    Intel is the one behind. They are severely behind Apple's A# Series SoC.



    Sorry, but Apple's not abandoning the overwhelming amount of recently granted IP for Intel.



  • Reply 20 of 36
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by TBell View Post


    It is clear you know the difference, but I think it is important to clarify neither Intel or ARM "made" the numbers you report. To me, "made" implies profit. The numbers you are using are gross revenue. That is what Intel and ARM brought in.



    The profit for the year for Intel, however, was 4.4 Billion. About a tenth of gross revenue. Arms Holding's profit for the year was about 274 million. Closer to half its gross revenue. So comparatively speaking, ARM keeps a much higher percentage of the gross revenue as actual profit (or spends much less to make its profit).



    ARM's number will likely only go up as companies like Microsoft start switching to ARM. Intel as a back plan should seriously start building its foundry business. It would be a win win for Intel and companies like Apple who are looking to escape Samsung.



    I think it cane used in either case so long as you refer to it being the revenue made or the profit made. But that?s neither here no their. Do revenue or profits from foundries out perform revenue or profits from Intel?s X86 foundries.



    Melgross? comment about the price of the chip is interneting, but I wonder how much the foundry would get? The full $25, but how much to Samsung for RAM and how much to Img Tech for the GPU, etc? Seems like x86 chips would still be Intel?s biggest money maker.



    That doesn?t mean I think Intel should ignore this area of business. I?m quite happy to read this rumor and hope it comes to fruition.





    PS: Could Intel use the 3D Tri-Gate on ARM PoP/SoCs?
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