Intel’s Mobile Puzzle

In 2010 Intel paid $1.4 billion for Infineon’s wireless unit which was then supplying the modem for the iPhone.

Intel promptly lost the Apple contract and has been making a big effort to win it back – reports say it has 1,000 engineers working on the project,

Now, according to Bloomberg, the iPhone 7 sold by AT&T and expected to launch in September will have an Intel modem.

It’s an interesting decision because Qualcomm has a superior modem, capable of 1Gbps made on TSMC’s 20nm process, where Intel’s modem, made on TSMC’s 28nm process, does 450Mbps.

Qualcomm is thought to get $15 for its modem and it is expected Intel will get less.

Assuming Intel gets $11-12 then the 23 million iPhones expected to be sold next year by AT&T (assuming they are all iPhone 7s) will bring Intel revenue of around $275 million.

Not much in terms of Intel’s $56 billion total annual revenues but enough to keep them in the modem game until their hoped-for breakthrough at 5G.

Will TSMC or Intel make more margin on these chips? For sure TSMC will make a margin and, possibly, Intel won’t.

While Intel can’t be expected to make cost-effective mobile chips in fabs set up to make PC and server processors, the puzzle persists that Intel won’t, or can’t, build a fab capable of producing cost-effective mobile chips on a leading edge process.

Making X-Scale processors on old processes was a major reason for that initiative failing.

But, despite Intel’s costly determination to sell mobile ICs – it lost some $7 billion in mobile in the last two years – the company still hasn’t figured out a way to manufacture mobile chips on leading edge processes while collecting a margin both on the design and the fabbing.


Comments

2 comments

  1. HaHaHaHa indeeed, neitherstnorste, after all ST knows how kill off a mobile business.

  2. David, I have a great suggestion to help Intel fix its mobile puzzle: why doen’t Intel buy STM? Hahahahaha!

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