Intel’s contract manufacturing business appears to have a new big prominent client.
Last November, Intel CEO Brian Krzanich said he would like Intel to expand its contract manufacturing business to bring in more revenue for the company. Recently Intel announced that it had won a major client for this business with Panasonic’s LSI division to manufacture processors for the next-generation of Panasonic’s audio and visual equipment.
Panasonic’s LSI division produces video encoding/decoding chips for all of Panasonic’s home theatre products from televisions to audio receivers and Blu-Ray players. The chips will be designed by Panasonic, then fabricated on by Intel on its 14nm process node.
While Intel has a number of other custom manufacturing clients, such as Altera and Micron, most of these clients so far have only been for FPGAs (field programmable gate arrays). This will mean Intel is stepping into an industry dominated by Taiwan Semiconductor Manufacturing Corporation (TSMC) and GlobalFoundries. While Intel is not trying to match these companies on scale, it will be interesting to see if its 14nm process node is enough of a competitive advantage to bring in more clients — possibly away from the established players.