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Intel exits 3rd party chip design services
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Monday, January 20, 2003
A little over a year after throwing its hat into the ASIC services ring, Intel Corp. is withdrawing. According to a spokeswoman for Intel Microelectronics Services, the Hillsboro, Ore. division stopped accepting new business earlier this month.
The microelectronics unit operated as a fabless ASIC supplier, designing chips for startups and small companies and helping them get access to major semiconductor foundries. The venture was intended to enable new applications that would also use Intel's microprocessors, flash memory, and communications chips.
"Intel has decided to focus on our core silicon business," the spokeswoman said. "The Microelectronics Services business in it's current form is not strategic to our standard products strategy."
Instead, Intel will take what it's learned from its ASIC customers and reapply the knowledge elsewhere within the company, she said.
But its abrupt retreat has severely damaged its prospects for winning future design business, according to Jordan Selburn, an analyst at market research firm iSuppli Corp., San Jose.
"Intel had a very strong technical offering, but they weren't alone at the top," said Jordan Selburn, an analyst at iSuppli Corp., San Jose. "Who's going to go to an Intel now as opposed to an IBM, LSI Logic, or Fujitsu that can offer the same silicon with less ulcer potential?"
Facing such formidable competition for a declining number of high-volume chip designs may have been one of the factors in Intel's sudden move.
"Even if they hit a grand slam, in six years they might have built it into a $1 billion business. That's good, but Intel is a $20 billion company," Selburn said. "It's a big risk with no huge upside for a company that size."
Intel said it will complete all its existing ASIC projects, and reassign Microelectronics Services personnel to other areas of the company. No layoffs were expected in relation to the closure.
By: DocMemory
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