Intel, TSMC to unveil strategic tie-up on Monday

Sat Feb 28, 2009 3:21am GMT

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 * Intel and TSMC to announce strategic tie-up March 2
 * No details on nature of cooperation or announcement
 By Janet Kornblum
 SAN FRANCISCO, Feb 27 (Reuters) - Intel (INTC.O) and TSMC
(2330.TW) will make a "strategic announcement" on Monday,
driving market and media speculation that the world's largest
chip maker might begin to outsource crucial manufacturing.
 Intel said in an emailed statement on Friday that sales
chief Sean Maloney and general manager of Ultra Mobility Anand
Chandrashekar will announce details alongside TSMC CEO Rick
Tsai in Santa Clara, California on March 2.
 Intel spokesman Chuck Mulloy would not elaborate, while
TSMC -- the world's biggest manufacturer of made-to-order chips
-- was not immediately available for comment.
 Intel announced in January it would shut plants in Malaysia
and the Philippines and its one surviving factory in Silicon
Valley, cutting as many as 6,000 jobs. At the same time, the
firm plans to spend $7 billion over two years to build
next-generation, 32-nanometer chip manufacturing capacity.
 Top global chip maker Intel has steadfastly maintained it
will manufacture its own microprocessors, but had previously
outsourced some processes, including chipsets and wireless
devices, to TSMC and other foundries, Mulloy said.
 As the cost of chip production has skyrocketed, its peers
and rivals, including graphics chip maker Nvidia (NVDA.O), have
migrated to fabless or "fab-lite" strategies. A deepening
recession is now curtailing tech spending while exerting
pressure on companies to safeguard profit margins by shaving
costs.
 Distant rival Advanced Micro Devices Inc (AMD.N) is
spinning off its own foundry company.
 Speculation in technology publications from PC Magazine to
EEtimes ranged from Intel outsourcing its Atom microprocessor
-- found in ultra-small laptops called netbooks -- to a deal to
transfer capacity.
 Shares in Intel held steady in after-hours trade.
 (Editing by Edwin Chan)
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