Feb 28 - Antony Currie and Breakingviews columnists discuss why Intel should be wary of overdoing its push to make semiconductors for rivals.
This news out of Intel this week it has struck a deal with Al -- to reduce. Chips Fulham which is not competing Xbox but it's a very this -- first very big conference got certain you've been looking at this. This would seem to be a great thing if you -- make chips wanna make more must be a great business is a great thing and small doses because on this thing -- -- and about the semiconductor industry chip industry is that. It costs just a massive amount of money to -- -- factories -- billion dollars for the latest ones in the prices on -- give us tonight he -- gonna -- if I send photos and absolutely absolutely the flip side of Mosul the -- of the transistors and yes yes they -- -- -- makes -- -- every time -- seniors Rachel and -- federal and I -- an -- -- responsible. Exactly and then -- the problem with -- is if you invest ten billion dollars -- to -- this -- -- -- -- If if it's if it's running all the time he meant to money if it's left -- you lose yet I thought I'd like -- is like like any industry into the car industry if you -- of 67% capacity then it's like it's a good you wanna running. Twenty -- -- and it's even more so the art history and so it went. Ideally what this type of deal lenses that Intel's got the factories are sitting below idol because people are you are buying many PC right they're buying mobile chips which Intel doesn't make Freeman may have said that additional stake in the exactly so Intel gets more moderate more business for its factories and extra profits. Summing investors face great right -- you. Guess a lot of space -- I think takes the view that they need to be ahead of the -- You know they they feel like if that behind it takes longer to catch up than a -- a little premature -- It's a deal to build to build a factory in it right when he wants to him and village with some extra work and that it's -- now that's clearly good as low as. As -- -- -- and cannibalizing its its business and become a commodity chip manufacturer which which is well which is a nice guy that -- That is the risk and Intel's famous for saying only paranoid survive and one way Intel's you know survived and done extremely well compared to most chipmakers -- for the past. You know forty years. Is that they've held control a standard. Mean amongst all microprocessor for PCs run the X 86 -- -- the problem is that mobile devices run a different platform in the -- standard. And -- -- control that they they don't control -- now another company does and so. The danger is that Intel will say okay we've got these factories there empty and we can make a lot of money by producing chips for other companies -- and other citizens in my about which you always -- exactly and then a couple the other contract manufactures do very well. A lot of them -- portly but until look at the good ones and we can fill these chips right. And you know they -- difference there but the cable make a lot of money in the meantime the danger is over the long run does that mean that -- standard which is you know kept it safe and secure and very profitable for forty years becomes -- Yes it's gonna chase of us exactly yeah and it's not going -- But so and so the -- -- MIT traces of the suspense what might get into it does because the money and then it becomes just another -- -- affectionately. But -- thanks rob thanks Richard will be back tomorrow with -- breaking views.