by Anton Shilov
01/28/2003 | 10:58 AM
Intel Corporation announced last week that it was going to cancel to provide ASIC services for third companies. Beginning from January 2003 the company ceased to accept orders from its partners on ASIC services and in future Intel will simply close this business.
Intel’s fables microelectronics unit had been designing chips for small companies that could not afford to hire their own team for that purpose. Since there are a lot of such startups to deal with consumer electronics and other similar devices, Intel definitely had, at least, a number of clients. It is necessary to note that Intel’s point was not to receive additional money by offering new services, but in the chance to promote its own technologies like CPUs, flash memory, communications chips and so on among the new customers. It appeared that the company has not succeeded in expanding their client portfolio and that is why they decided to drop this kind of business even despite of the fact that there are a lot of prospects in designing ASICs and helping other companies to work with foundries.<%BANNER[article]%>
According to the official report from the Santa Clara, California semiconductor designer, Intel drops the the Microelectronics Services business in its current form as it was not strategic to their standard products strategy. Instead, Intel will take what it's learned from its ASIC customers and reapply the knowledge elsewhere within the company.
There are also a lot of rivals within the field, like IBM, LSI Logic or Fujitsu that offer the same services. Given that there are no a lot of big clients now, the goal of competition is to offer lower prices, as the only thing smaller companies really need is to cut down the expenses. Apparently, it was not so easy even for Intel to offer huge discounts. Moreover, in case the company earns not so much from designing ASISs for third-parties, why not reassign the staff to Intel’s own projects that are more profitable?
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.