Intel Corporation (NASDAQ:INTC) and Cisco Systems, Inc. (NASDAQ:CSCO) have entered into a manufacturing partnership deal, reveals Korea times, the daily in Korea. There has not been any official announcement from either companies yet.
According to an Intel Corporation (NASDAQ:INTC) executive report, the firm, headquartered in Santa Clara, Calif., hopes to take advantage of the growing demand for value-added programmable and logic chips, a profitable segment.
The report further claims that the deal between the two companies has vital importance; if Intel Corporation (NASDAQ:INTC) is successful in manufacturing the chips designed by Cisco Systems, Inc. (NASDAQ:CSCO), it might have a good chance of enhancing its chip making business. The deal can be profitable for Intel Corporation (NASDAQ:INTC) as the PC business of the company is declining fast, and the deal will help Intel Corporation (NASDAQ:INTC) to counterbalance its loss from declining PC business by increasing its contract manufacturing business.
Intel Corporation (NASDAQ:INTC) is a contract chip manufacturers. Its customers comprise of Netronome, Achronix, Tabula and the latest to join is Altera. Both, Intel in the United States and Cisco have not issued their statements on the news.
There are startups for which Intel is making chips on a contract basis. Altera, on the other hand, is interested in Intel’s 14-nanometer processing and FinFET technologies unlike the other firms who are interested in Intel’s 22-nanometer processing technology.
According to officials, Intel is more focused on the programmable chips as clients redesign the programmable chips and use them in base stations, cars and satellites leading chipmaker to adapt a selective strategy.
One of the sources at Samsung Electronics told that Intel wants to increase its cutomers base in the CPU sectors and that he is not very much concerned about Intel’s foray into logic chip business because Samsung has a clear strategy and is also ahead of the competitors.
He further went on to say that the clients of Samsung logic chips are Qualcomm, IBM, Xilinx and STM Microelectronics.
The agreement comes as a bright spot in the rough earnings of Intel Corporation (NASDAQ:INTC) from its core CPU related businesses, which was affected to a great extent by the transition to graphic processing unit chips used in smartphones and tablets. The consumer electronic giants such as LG and Samsung said that they do not rely much on their PC manufacturing, which could be the probable cause of Intel Corporation (NASDAQ:INTC) Korea’s declining revenues.