Intel set to form new partnership with TSMC

Intel and TSMC could form a new partnership in NAND flash

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

The press who have been invited to attend the event report that TSMC representatives will include chief executive Rick Tsai and 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 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 6,000 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 run by the Advanced Technology Investment Company using AMD's manufacturing assets.

However, Intel only recently announced that it will build $7bn (£4.9bn) worth of new chip manufacturing plants, and it has always promoted the competitive edge it has gained from running its own manufacturing operations; it moved from a 65-nanometre chip to 45-nanometre and plans a 32-nanometre later this year.

More likely is the presumption taken by financial publication Barron's which suggests that 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 plans to develop Atom-based chipsets 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 that the partnership will be a business model for developing NAND.