All it takes is one look at the recent line-up on IHS iSuppli’s annual Semiconductor company ranking-by-revenue to see change is afoot in the industry, driven by the growing demand for mobile devices and declining demand for PCs and laptops. And overall, iSuppli has downgraded its semiconductor market forecast for 2012; it seems that even the healthy growth in the wireless semiconductor market can’t make up the difference of declining revenues in other areas, as Dale Ford noted in a recent press release. 

But regardless, its nice to read that there is one bright spot keeping the industry moving forward and it’s still expected that 2013 will be a turn-around year for the industry, driven by continued growth in the mobile market, as tablets make gains in such untapped markets as education. For example, according to a post by Ryan Faas in CITEworld, “2013 will be the year of “explosive growth” and “viral expansion” of small tablets in schools.”

While Intel still reigns in the number one spot, its revenue dropped 2.4% while Samsung’s rose 6.7%. And Qualcomm jumped to 3rd place with a 27.2% increase in revenue. This shift, clearly driven by smartphones and tablets, has industry journalists and bloggers sitting up and taking notice – not so much with Qualcomm’s success (that much is obvious), but speculating on how Intel can retain its top position by establishing a presence in the mobile space.

04-12-2012-15-02-53-620x450A tangled web of talk is brewing around Intel, Samsung, TSMC, and Apple, so much so that it led to a drop in TSMC shares, as investors were somewhat hesitant after seeing reports that Intel may “fight for a piece of the Apple pie with TSMC,” notes an article in The China Post. Originally it was thought that Apple would divide its microprocessor orders between Samsung and TSMC, but now there are rumors that the company is considering transferring part of that to Intel (specifically, Apple is said to be targeting Intel’s x86 for the iPad).

EETimes Rick Merritt sees this as a plus for Intel, and posted a very insightful analysis on why Intel should re-invent itself as “one heck of a foundry that happens to have its own line of very successful products”. He reports rumors that the company is not only being approached to provide “Apple’s A series mobile applications processors” but “high-end router chips for Cisco as well.”  He goes on to say that this makes sense, because both chips are for internal use, so there’s no concern about competition, and that rather, this could boosts Intel’s business from the two companies.

In his SemiWiki post, How Apple Plans to Leverage Intel’s Foundry,  blogger Ed McKernan takes a look at the concept from Apple’s perspective, and paints a broader picture of Apple’s strategy to compete with Samsung by building a vertically integrated supply chain by 2014 that is “larger and lower cost than what Samsung has today.” (In related news, Apple CEO Tim Cook announced today plans to move at least one Mac production line back to the US next year.)

McKernan mentioned TSMC as a “near term” foundry solution because there is concern that TSMC can’t handle Apple’s capacity while still serving its other customers. On the other hand, Intel, with declining revenues, has three 14nm fabs ready to fill the bill without Apple investment, as well as the technology in place to provide “an extra shrink and significantly lower power in a move to Intel’s 14nm process.”Mckernan writes, “the Intel Fab option is really the one road available to catapult Apple beyond Samsung in their battle for market share leadership in Smartphones and Tablets. It is also the one option that is unavailable to Samsung.” McKernan also references other other discussions between Apple and Intel that involve Intel building ARM chips for the iPhone if Apple switches the iPad to x86.

However, not everyone sees this as a viable solution for Intel. In a comment on this post Daniel Nenni argues “Intel will need to learn how to manufacture an SoC before they can work with Apple. Intel will need to support commercial EDA tools and IP. Intel will also need to sign an ARM license. Lets see who the new CEO is before we get too excited about Intel being a foundry.”

Change is afoot indeed. And hopefully for the better. ~ F.v.T.

Francoise von Trapp

They call me the “Queen of 3D” because I have been following the course of…

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