Intel Corp. is negotiating with many companies about forming foundry relationship. The company is also hiring new personnel to support the effort, according to an analyst with an investment bank. It is reported that Intel is interested in making chips for communication and consumer electronics industries.

"Over the last few months we have been hearing comments from industry contacts that Intel is talking to OEMs about a foundry relationship. We have heard Intel is looking for ASIC designers and other support staff for this effort. More recently, we understand Intel has approached Motorola. Currently, we believe Motorola has been working with Toshiba as an ASIC/foundry vendor for cell phone components. We believe the direct-to-OEM foundry model makes sense," analyst Gus Richard with Piper Jaffray wrote in a research note, reports Tech Trader Daily.

By the end of 2012 Intel will have five 300mm fabs that will produce chips using 22nm process technology. By the middle of the decade some of them will be capable of processing 450mm wafers to make chips using 14nm fabrication process. Under any scenarios, Intel is investing huge amounts of money into manufacturing and while the market of microprocessors for various devices is growing rapidly, Intel may still be naturally interested in making chips for others as well in order to ensure maximum utilization of capacities.

Intel is naturally interested in creating and making custom system-on-chip devices for various companies that do not directly compete against the chip giant, especially if the SoCs are based on x86 cores. Intel is hardly interested in making solutions with ARM cores. What should be kept in mind is that Intel does not have a history designing ultra-low-power chips and its system-on-chip (SoC) design methodology is archaic, according to the analyst.

Interestingly, but the analyst still observes a large group of communication and consumer electronics companies as potential customers for Intel's foundry business unit.

"Likely target customers would include EMC, Cisco, Juniper, Sony, Motorola, Apple, Nokia, and other large customers of leading edge logic. Intel has clearly articulated they are interested in working with companies that want to use x86 architecture. The company is not interested in enabling its fabless competitors or ARM," said Mr. Richard.

Tags: Intel, 22nm, 14nm, Apple, Sony, Semiconductor, Nokia, EMC, Cisco, Juniper