Intel Corp. has reportedly formed a new business unit that would make chips for third-parties. But while the company may compete against Taiwan Semiconductor Manufacturing Company or Globalfoundries, it will hardly do it in order to obtain additional source of revenue. The motives behind the decision of the world's largest maker of chips to make chips for others may be less obvious.

''The company has a small foundry business, which operates under the radar and is 'always looking' for customers. The company has been doing this for some time, but not saying anything about it or at least not publicizing it," an anonymous source told EETimes web-site.

It is not logical to expect Intel to make central processing units or graphics processing units for companies like Advanced Micro Devices or Nvidia Corp., hence, those businesses will remain with TSMC, Globalfoundries and so on. However, Intel may produce various FPGAs, system-on-chips featuring its own and third-party technologies, wireless chips and so on. Moreover, through its foundry business unit Intel can learn more about its process technologies, get experience with certain emerging applications and ensure that its manufacturing capacities are fully utilized.

''I think making money isn't the driving reason for Intel's foundry interests. They would have to be looking for other gains-like understanding a new technology, or getting their foot in the door of an emerging application,'' the source added.

But while Intel may be interested in foundry business, not a lot of fabless companies may be interested in Intel as its production costs are unknown.

''Will Intel become a big foundry player? On the wireless or (FPGA) side, they have the potential of being a foundry player. Does Intel have the capital and manufacturing to be in the foundry business? Yes. But the question is can they compete at the same cost as TSMC, UMC and GlobalFoundries," said Dean Freeman, an analyst with Gartner.

Intel did not comment on the news-story and did not confirm existence of its foundry business unit. Even if it has one, it is pretty clear that the world's largest supplier of microprocessors is testing the market these days, not entering it seriously.

Tags: Intel, Semiconductor