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Intel to make chips for Achronix

Over its entire corporate history, chipmaking giant Intel has designed and built chips for exactly one customer: itself. Now, however, Intel has made a move that may indicate a fundamental strategy shift for the company: Achronix Semiconductor has reached a deal with Intel to build Field Programmable Gate Arrays (FPGAs) on Intel’s 22nm process technology. The manufacturing arrangement will get underway in 2011, and Achronix is touting Intel’s technology as a way for the company to deliver a 300 percent performance increase in its chips, while requiring 50 percent less power and costing 40 percent less to manufacturer compared to the 28nm technology the company is currently using.

“Intel has the best process technology in the world and we are privileged to have formed this strategic relationship, which enables simultaneous improvements in speed, power, density, and cost,” said Achronix CEO John Lofton Holt, in a statement (PDF)

FPGAs are integrated circuits that can be reprogrammed after they’ve been manufactured. Achronix is touting the forthcoming Speedster22i—to be made on Intel’s 22nm process—as an ideal product for emerging devices aiming to supply 100 gigabit and 400 gigabit Ethernet, as well as LTE 4G mobile communication technology. Achronix also touts the Speester22i as the first commercial FPGA family that will be manufactured in the United States, easing fears in some quarters that hostile powers might somehow sabotage or compromise the design of components made in other countries—thus giving the Speedster22i special appeal to the defense and aerospace industries.

Some industry watchers see the Achronix deal as a harbinger of Intel’s recent efforts to diversity its business, expanding beyond desktop and notebook CPU products and into other areas. By setting itself up as a contract manufacturer for other chipmakers, Intel may be positioning itself for lucrative work making other people’s chips—and if it can do that work in the U.S., it can potentially tap into manufacturing related to U.S. national security. However, another scenario is that Intel may be using access to its fabrication processes as a way to make smaller, fabless chipmakers dependent on Intel…and thus ripe for takeover should their products become successful enough to be interesting to a business as large as Intel.