Popular computer chip manufacturer, Intel (News - Alert), announced on Monday that they have signed a contract with Panasonic (News - Alert) to create chips for their audio and visual equipment markets. Though Intel had been one of the leading computer chip manufacturers in the past, the American company has slowly fallen behind its rivals in making chips for emerging mobile device markets. Now, the company is looking to expand its marginally profitable contract manufacturing business in order to stabilize the company's revenue.
According to an official statement by the Intel Corporation, the company will use its leading-edge 14 nanometer process technology to create system-on-chip solutions for Panasonic's products. This announcement comes one year after Intel publicly signed a contract with Altera (News - Alert) to make programmable chip, which is still the biggest publicly announced contract manufacturing deal made.
Despite the fact that Intel has fallen behind in computer manufacturing sales, their manufacturing process is still able to produce some of the fastest, smallest and cheapest transistors in the field. While competitors like Qualcomm (News - Alert) are able to produce high quality chips that offer more power and feature integration for mobile devices than Intel does, Intel is able to beat their competitors on price points. The fact that the Intel chips also use fewer resources is an added bonus, which means that the chips ultimately do more with less.
The highly efficient, leading-edge manufacturing process is predicted to give Panasonic the market advantage in both performance and power-consumption with their chips. This should help Panasonic take over the audio and visual equipment market, or at the very least gain a substantial lead. Ideally, this partnership will also benefit Intel, as their contract manufacturing process could grow to provide more than just the small fraction of revenue it currently provides the company.