In a First, Intel Agrees to a Chip Deal With Achronix

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Intel (INTC) has struck a deal with Achronix Semiconductor to manufacture chips for the boutique player using its latest high-tech manufacturing production line, the companies announced Monday. This is the first time Intel has agreed to such an arrangement.

Intel will provide access to its 22 nanometer manufacturing technology, which Achronix plans to use for to make programmable chips designed to offer substantially higher performance at a lower cost and reduced power needs. With Achronix's designs in hand, Intel plans to pump out that company's Speedster22iFPGA chips using its exceptionally small 22 nanometer technology that it expects to have up and running late next year, according to a Wall Street Journalreport. Currently, Intel's manufacturing production lines only go as small as 32 nanometers.

The deal marks the first time Intel has agreed to use its latest technology in producing chips for another semiconductor company, as opposed to offering up production lines that are set to manufacture chips that are based on older technology, the Journal notes.

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An Intel spokesman said in the report that the chip giant would entertain doing more of this in the future for other companies besides Achronix. The Achronix order is expected to use less than 1% of Intel's production capacity once it gets the 22 nanometer chips running on its production line late next year, the Journal notes.

In making the move to open up its latest nano chip production lines to other companies, Intel leverages those plants when its not running the production lines for its own products, gets a peek at some of the latest and greatest coming out of smaller, nimbler semiconductor companies, and takes away potential business from semiconductor foundries in Asia.

"The combination of the advanced 22nm process from Intel and the advanced FPGA technology technology from Achronix enables Speedster22i to eclipse other FPGA solutions expected to hit the market in the next few years," said John Lofton Holt, Achronix CEO, in a statement.

When its technology makes it to market, Achronix Speedster22i chips will be used in the telecommunications industry for such next generation applications as LTE mobile communications to the networking industry with 400G Ethernet networking.

Terms of the deal were not disclosed.