Altera Corp, a designer of processors used in phone-network equipment, plans to use Intel Corp as a manufacturer for future versions of its chips, in a challenge to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
Intel will build so-called field programmable gate arrays, or FPGAs, for San Jose, California-based Altera when the two chipmakers move to 14-nanometer (nm) production technology, the companies said on Tuesday in a statement.
Intel is slowly opening up its factory network to other companies, seeking to gain ground in the US$30.7 billion made-to-order chip business by expanding in a market dominated by TSMC.
Using Intel for production will help Altera sell the most advanced chips in its markets, Altera chief executive officer John Daane said.
“We continually survey the industry for technology that may give us an advantage, and we identified that Intel was more than a generation ahead in process technology,” Daane said in an interview.
Under the terms of the agreement, Altera will be Intel’s only major FPGA customer on 14-nm manufacturing. Altera will use Intel exclusively for chips made on that process and will keep using TSMC for less advanced production, Daane said.
Shares of TSMC, the world’s largest chip foundry, dropped 1.4 percent in Taipei in the early session on Monday, but regained momentum later to close up 0.97 percent. The TAIEX rose 0.22 percent.
Altera and TSMC “reaffirmed their commitment” to a long-term partnership, with the company remaining “Altera’s primary foundry, supplying a wide array of processes,” TSMC said in a statement to the Taiwan Stock Exchange on Tuesday.
Intel dominates the semiconductor industry, with a market share of more than 80 percent in PC processors.
Altera’s chips are used in telecoms equipment, military hardware and computer networks.