Intel Sees Potential in Foundry Business, Still Reserved Though

We've seen how Intel has started manufacturing processors for other companies besides itself, and now we get to see just what its leadership thinks of the practice. 

Apparently, Intel is accepting contracts from other companies because it has leftover foundry capacity to use for such things. 

That means that the Intel Custom Foundry division isn't going to become a prominent factor in Intel's strategy. 

Even now, whatever activities the Custom Foundry is carrying out are being kept under wraps. 

Still, it is very possible that Apple SoCs, and other such things, will be produced. There is no evidence of anything having already been decided, but still. 

"The business model that we have today is one that I am extremely comfortable with and we are working as hard as possible to maintain," said Paul Otellini, chief executive officer of Intel, during the quarterly conference call with financial analysts. 

"As compared to other non-integrated device manufacturers, we get paid twice for our products: we get paid the equivalent of a foundry margin and we get paid the equivalent of an architectural margin and that allows us to generate fairly nice margins. So as long as we can fill up all of the factories we can build with Intel products at those kinds of rewards in terms of the ROI, that makes the most sense for us."

Intel's CEO has further said that the few contracts it has secured so far are along the lines of learning experiences for them. An example is the agreement to make Netronome Next Flow processors. 

"You havve seen some small announcements to that effect, where we have signed up some companies for some foundry activity over the next several years. I would look at those, and I would ask you to look at those as being learning experiences for us," Otellini said. "Anything is theoretically possible. The Apple win would be a lot more attractive than the Qualcomm win."

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