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Intel, Panasonic Ink Manufacturing Agreement

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Intel Corporation (INTC - Free Report) has signed an agreement with Panasonic Corporation’s System LSI Business Division to produce system-on-chip (SoC) products for the latter, using its proprietary 14-nanometer (nm) Tri-Gate transistor technology.

Intel's Tri-Gate technology is a proprietary 3D transistor technology and its 14-nm transistor technology for SoC is a highly developed and enhanced version of the Tri-Gate process technology. These transistors enable efficient and high performance chips compared with the earlier versions of transistors. Therefore, this allows chip designers to select transistors for low power or high performance, based on the applications.

The chips produced will be used in audio visual equipment and offer higher performance and functionality at lower power levels.

The collaboration should be a positive for both the parties. Intel’s advanced manufacturing facilitates the fabrication of highly integrated, more powerful chips that generate less heat at lower costs. Therefore, Panasonic’s SoC products using Intel’s technology will have a lead over chips offered by traditional manufacturers like Taiwan Semiconductor Manufacturing Company.

For Intel, this is a golden opportunity to ramp up production at its fabs and drive up utilization rates.

Recently, Intel expanded its foundry partnership with Altera Corporation (ALTR - Free Report) to manufacture advanced multi-die devices, using its 14-nm low-power manufacturing process. Additionally, Intel’s custom foundry business has announced agreements with other semiconductor companies namely Achronix Semiconductor, Tabula, Netronome and Microsemi Corporation (MSCC - Free Report) .

We believe these agreements will be beneficial for Intel’s Custom Foundry business which should in turn drive up utilization rates and boost results, going forward.

Intel is making all possible efforts to diversify its business and reduce its dependence on the PC market, which is currently suffering from declining sales globally. The company is applying a number of strategies to increase its foothold in mobile, wearables and Internet of Things. These are the emerging areas within the technology space where companies like Cisco (CSCO - Free Report) , Google, Apple and Facebook are trying to build a position.

Currently, Intel sports a Zacks Rank #1 (Strong Buy).

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