Why the Intel and Rockchip Partnership Could Actually Be a Big Deal

This week Intel announced a new strategic partnership with low-budget chip manufacturer Rockchip, in a move that is bound to change the course of the chip industry.

The two companies will be working together on the production of Intel’s next-gen processors dubbed SoFIA which will be end up being implemented in budget Android tablets. Intel hopes to be able to sponge off Rockchip’s reputation in China, without having to start building relationships from scratch. But why would Intel abandon the strategy that ultimately set it apart from other chip manufacturers? For example, companies like Qualcomm or AMD design their chips but the manufacturing processes are handled by third-party partners like Samsung or GlobalFoundries. But that wasn’t what Intel set out to do. The company kept everything in-house, including designing, manufacturing and selling of these products. Now Intel is fundamentally changing the way it does business, by letting another company use its CPU cores. What that means basically is that Rockchip will the first company to make use of Intel’s technology in order to produce its own chip products with Intel processor cores.

But why the shift and what does this signify? An obvious answer would be that Intel needs to try out a new strategy in order to crack the surface of the tablet space, where it has offered strong products, so far. The problem is, these offerings haven’t been widely adopted. The new partnership with Rockchip will enable Intel to take advantage of Rockchip’s expertise and current market penetration in order to get Intel technology embedded into $100-$150 / €73-€110 Android offerings, which what is basically selling these days. So by the middle of 2015 Intel and Rockchp’s SoFIA SoC spawn will be launched on the market, with four Intel Atom cores and equipped with an Intel 3G modem.

It should also be noted Rockchip was in around 40 million tablets last year and that’s exactly the goal has set up for itself in 2014, so the partnership will open the doors to a decent TAM, too. Thus Rockchip will be able to license Intel x86CPU IP for use in the SoC that will be sold barring the Intel branding. Rockchip’s current products use ARM and Vivante GPU cores, so in the future we might end up seeing a SoC using Intel x86 cores with Mali graphics. The partnership surely marks a crucial transition in Intel history. Both companies will focus on selling the SoFIA chips to their respective customers and Rockchip will be able to continue selling ARM-based SoCs. Note also that Intel won’t be making any big investments in Rockchip. At the moment there’s only one product in the works, in the form of the quad-core Silvermont with integrated 3G, SoFIA, Intel highlighted this partnership is actually a “strategic” one.

This in turn signifies this is not a limited agreement an in time we’re going to see more engagement over time. If the first quad-core chips turn out to be a good deal, maybe Intel will be start deviating its mobile SoC design integration efforts to Rockchip. Time will tell.

Intel and Rockchip partner up to produce low-cost tablet chips
Image credits to TheDroidGuy

Posted in: Hardware, Mobile Phone, News, Preview, Tablet