Report: Intel Corporation to Build Another Mobile Chip for Spreadtrum

By Ashraf Eassa Markets Fool.com

Per a fresh report from DIGITIMES, mobile chipmaker Spreadtrum Communications will yet again tap chip giant Intel (NASDAQ: INTC) to manufacture a mobile-oriented system-on-a-chip.

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As DIGITIMES notes, Spreadtrum had previously announced a chip known as the SC9861G-IA that was also manufactured by Intel's contract chip manufacturing division, known as Intel Custom Foundry (ICF).

Image source: Intel.

The upcoming chip that Intel will manufacture for Spreadtrum is reportedly known as the SC9853, and DIGITIMES says that it should be released in the third quarter of this year.

What does this mean for Spreadtrum and Intel? Let's take a closer look.

Intel's back door into the mobile processor market

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Last year, Intel formally disclosed that it had cancelled its entire pipeline of announced mobile processors -- the SoFIA family of integrated applications processors and modems as well as a high-end chip known a Broxton, which did not include a cellular modem on the die.

By pulling the plug on these projects, and significantly scaling back its efforts vis-a-vis mobile applications processors, Intel has been able to substantially reduce its operating expense structure, which improved profitability.

However, Intel apparently doesn't want to be entirely out of the mobile applications processor loop. Recall that it purchased a 20% equity stake in Tsinghua Unigroup, a company that owns Spreadtrum as well as cellular modem maker RDA Microelectronics.

The purchase was intended to be strategic: Not only would Intel own a piece of this company, but it would leverage its ownership stake to enable a collaboration between Intel and Spreadtrum to build chips targeted at the smartphone market.

At the time, the deal was framed as Spreadtrum building chips based on Intel's core architecture designs with those chips also likely being manufactured in-house by Intel as soon as practicable. And, indeed, the very first fruit of Intel's and Spreadtrum's collaboration was just that -- a chip designed by Spreadtrum and manufactured by Intel, with Intel processor cores inside.

Today, though, it appears that Intel is less interested in continuing to provide intellectual property to Spreadtrum such as processor cores and is more interested in simply having Spreadtrum manufacture its ARM-based chips at Intel.

Such an arrangement allows Intel to participate in the smartphone market without the effort and risks associated with developing chips, platforms, and ultimately products. Instead, it relies on a company that knows what it's doing to handle all of that and simply makes money by selling manufacturing services.

What do we know about this chip?

All DIGITIMES has said about this upcoming chip is that it will be manufactured in Intel's 14-nanometer technology (Intel's best technology currently in production) and that it will be called the SC9853.

Based on the model number, it appears that this upcoming chip will be a lower-end product than the SC9861G-IA that Intel is building for Spreadtrum (that chip is targeted at midrange and high-end smartphones, per Spreadtrum).

Indeed, if I had to guess, I'd say that this is a successor to the SC9850 that Spreadtrum is currently selling. That chip has a quad core ARM Cortex A7 processor running at 1.3GHz, LTE support, ARM Mali 820MP1 graphics, support for 1080P video, and is manufactured in a 28-nanometer technology, per Spreadtrum's product page.

Putting additional guesses out there, I'd imagine that the upcoming chip will see a migration from the ARM Cortex A7 processor (a 32-bit core) to the newer ARM Cortex A53 core (this is a widely used processor core in mobile phones). Due to the use of Intel's higher-performance 14-nanometer tech, I expect frequencies to be much higher than the 1.3 GHz that the A7 cores in the SC9850 run at.

Beyond that, I expect upgraded graphics, multimedia, camera, and cellular capabilities -- the usual.

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Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.