TSMC Could Make Half Of Intel’s Atom Output

The chips will be made on a 40nm process at TSMC’s Tainan fab in the south of Taiwan.

When Intel announced the TSMC deal in March, there was a fair amount of guff put about that TSMC would only make SOCs which included Atom as a cote.

Now, according to French bank BNP Paribas, TSMC could manufacture up to 50% of Intel’s 40nm Atom production and maybe a higher percentage at 32nm.

The French bank says Intel is using TSMC ‘to help reduce Intel’s cost of manufacturing’.

According to The Information Network, Intel has lost money on the Atoms made in 2008 and 2009.

In March, the explanation for the outsourcing deal was: “Because Intel’s cost structure is so outrageous. Its conventional microprocessors can absorb all that cost – Intel still gets an average of about $100 for its processors – but you turn that structure to making jelly bean products and it doesn’t work.”

That was the view of Europe’s top chip analyst, Malcolm Penn, CEO of Future Horizons.

As well as manufacturing cost, Penn put forward another explanation of Intel’s deal with TSMC:

“Intel doesn’t like markets it can’t control. The markets Atom’s going into are going to be fickle and horrid. There’s going to be thousands of customers, and there are going to huge fluctuations in demand and sudden cancellations. Intel can pass that burden on to TSMC. Intel doesn’t like markets like that. They have 90% of the PC market where Intel controls everything. It’s a very predictable, stable market with one competitor.”

DigiTimes also reports BNP Paribas as stating that TSMC could be making Intel’s Larrabee GPU show-cased by Intel executive vp Sean Maloney at last week’s IDF.