Summary
The partnership between Intel and TSMC will allow expanding Intel platform well beyond PC, notebooks and Net Books. Access to IP, will allow a set of customers who value customization consider Intel platform. In addition to access to IP and ASIC design capability, TSMC can offer Intel a lower cost manufacturing facility to compete more effectively.
Analysis
In collaborating with TSMC Intel solves three problems at once: 1) ability to cater customers who value customization, especially to achieve lower foot print, 2) high cost of manufacturing at Intel's bleeding edge facilities, and 3) Access to prepheral and other IP. This strategy allows Intel to offer solutions for devices well beyond Mobile Internet Devices (MID), or smart phone (for which they do not have the needed power efficiency). Intel will be competing in Digital Set Top boxes, Game platforms, and a slow of smart appliances.
Intel has collaborated with TSMC before sales of xScale to Marvel and shutting down Colorado ASIC facility. If Atom is being promoted to replace xScale in a similar startegy, this collaboration is a good move for Intel.
