It is not good for Intel to invest large sums of money in mobile development and investment

Without an open policy, Intel is afraid of a surge in the cost rate caused by too much idle resources due to low operating rates. This would be detrimental to Intel's use of large sums of money for development and investment in the mobile sector.

Intel's Open chip generation is either to ease the drop in factory start-up rates due to a PC slowdown or to make strategic partnerships with arm manufacturers through open foundry work.

Recently, Intel's new CEO division said at the Intel investor meeting that Intel's chip-generation plant will be open to all chip companies. This is seen by the industry as an important symbol of Intel's transformation.

All along, Intel has a great advantage in semiconductor manufacturing processes. It also provides the basis for Intel's competition with AMD in the PC market. But as the global PC market has slipped, Intel has seen overcapacity in its capacity, with only 60% per cent of factory starts. In addition, Intel needs to redistribute its energy in the face of the tough situation in the mobile world.

In fact, as early as February this year, Intel has announced the use of the introduction of the 14 NM 3D transistor technology for chip manufacturers Altera programmable chip. It is also thought to be a test water for Intel's full generation in the future.

In July this year, the company said that Intel had consistently used state-of-the-art technology and production lines to produce desktop-level chips and to produce atom products with older production lines, but now Intel will give priority to the production of atom mobile chips with more technical strength and resources.

But bold investment in the emerging world means a rear margin of support. Perhaps the full liberalisation of OEM companies, and the active use of idle resources, reflects Intel's revenue concerns over mobile-aggressive spending.

It is also worth looking forward to whether Intel will be able to make its own strategic attempt to move more strategically, by providing the arm manufacturers with OEM work.

Factory start rate is only 60%

In the first 6 months of the 2013 fiscal year, the net profit was 4.045 billion U.S. dollars, down from 5.565 billion dollars in the same period last year, with a revenue of 25.4 billion dollars, down from 26.4 billion dollars in the same period last year, according to earnings reports.

Intel's decline in revenues and profits comes mainly from the negative impact of the PC business. Global PC sales fell 8% in the third quarter of this year, with 20% of Intel's sales coming from server computer chips, according to data.

The decline in sales also led to a drop in Intel's factory start-up rate. Jim Mcgerregg, a market research firm Tirias study analyst, said Intel's factory starts fell to about 60% per cent, well below normal levels.

The problem for Intel is that low utilization of factories and production lines will cost Intel a lot of money.

To address the problem of low factory start-up rates, Intel has taken the decision to close some of its factories. In September this year, Intel announced it would close a chip manufacturing facility in Massachusetts, which would cause some 700 intel employees to face unemployment.

In addition to shutting down the plant, Intel has also been focusing on offering OEM services to other chip makers since February this year, and is seen as the first bold plan by the original Intel CEO, Paul Otellini, since resigning late last year.

On the one hand, the provision of foundry services means that Intel's advantage in chip technology and capacity will be diluted in front of rivals. And that is why Intel initially cooperated with only a subset of the chip makers.

But on the other hand, without an open strategy, Intel is afraid of a surge in the cost rate caused by too much idle resources due to low operating rates. This would be detrimental to Intel's use of large sums of money for development and investment in the mobile sector.

For chip makers outside Intel, especially the arm-side chip makers, the lack of capacity has been exacerbated since last year as demand for smartphones has grown too fast. Companies such as MediaTek and Qualcomm have seen too many shortages of capacity.

Industry analysts point out that Intel is open to arm manufacturers and will attract more customers such as Apple, in addition to revenue growth. In addition, Intel's chip production capabilities and factory size make it cost far less than its competitor, TSMC and Samsung.

But analysts at Merrill Lynch point out that Intel's customers in the wafer foundry sector are weaker in the short term.

The mobile strategy of Ke Qi

Wenjun, a senior analyst at Isuppli, believes that Intel opens factories for arm manufacturers, perhaps more at the mobile-strategic level.

Some analysts believe that Intel's 14 NM manufacturing process will enable it to lead the competition, this is Qualcomm, MediaTek, such as temporarily unable to reach the technical level. But before 14 nanotechnology is yet ripe for market, Intel needs to look at immediate tactical considerations to shorten the competitive time lag.

By working with ARM chip manufacturers, Intel may have some know-how details on mobile chip design from collaborators. All of this will allow Intel to win time in the next 14 nm competition.

In addition, it also encourages hardware vendors to launch next year computers that can run Windows and Android or Chrome systems and work with Intel. It is also seen as a daring place for the division's odd-era intel.

In the short term, Intel's foundry strategy has at least the ability to disrupt the market price of chips. Some analysts believe that, in the case of reasonable prices, Intel is likely to get a contract with Apple A7, Qualcomm, NVIDIA cooperation, which will also cause the chip market price decline.

Another issue of concern is whether Intel is prepared to pay the licensing fees to arm, like its old rival, AMD, to achieve more of the possibility of chip design.