Intel, REI sign licensing agreement

Electronic News, May 27, 1996 by Sarah Cohen, Peter Brown

Santa Clara, Calif.--Under terms of an agreement between Intel and Rochester Electronics Inc. (REI), one of the earliest microprocessors in the Intel x86 family--the 8088 microprocesor--will no longer be manufactured by Intel. The agreement signed last week gives REI the rights and technical data to manufacture 29 Intel products. However, lead times for delivery of products from Rochester to systems OEMs could stretch out during the transition period, according to REI officials.

The move also portends the closure of an Intel fab in Oregon where the products were previously manufactured, and will result in the end-of-life of some of Intel's products. For example, Intel will discontinue manufacture of 2.0-micron NMOS and 1.5-micron CMOS chips on 4-inch wafers as a result of the closure. These products include low-end 8-bit controllers, peripheral devices, keyboard support products and 2K SRAM.

"Rochester will begin taking orders for some of the affected parts as soon as possible, but there may be some lead time stretch-out as we get the process up and running in our foundries," said Curt Gerrish, REI president and CEO, in an interview.

Mr. Gerrish explained the lead time delay between the two companies--given a worst-case scenario--could be nine months. "If we don't receive any inventory from Intel, or we have to start from scratch in our manufacturing, the maximum time frame of delay we are talking is nine months," he said. However, nothing will be known for certain concerning the state of the Intel inventory until Intel notifies Rochester of its plans next month. Mr. Gerrish added that Intel's customers had not been notified of the deal as of late last week.

REI will manufacture the 8088 microprocessor if the need arises, as well as the 82XXX series logic chips and communication devices such as USARTs, Ethernet LAN controllers, and codecs. Intel said it was not longer economicaly feasible for the company to manufacture 4-inch wafers.

The transfer of the manufacturing rights will be handled under an earlier technology license agreement between Intel and REI that was signed in January. Intel will ship those orders placed prior to April 30.

Meanwhile, in a separate development, International Rectifier Corp. (IR) and Rochester Electronics Inc. (REI) have entered into an agreement under which REI will serve as the sole continuing manufacturing source for selected discontinued HEXFET power MOSFET devices--specifically, non-military products housed in TO-3 and TO-39 packages.

As of July 1, REI will assemble and test HEXFET products using dice supplied by IR. Initially, assembly and test will be done at REI's contract facilities. REI will continue to use IR part numbers in order to minimize documentation issues for customers.