June 30 (Bloomberg) -- The transition to a new type of computer-chip manufacturing will be too expensive for some manufacturers, giving market leader Intel Corp. an edge, said Patrick Gelsinger, the company's senior vice president.

Starting in 2012, the three biggest spenders on chip- production equipment -- Intel, Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. -- will begin using 450- millimeter disks of silicon. The cost of the shift will pare the number of semiconductor manufacturers down to fewer than 10, Gelsinger predicted at a briefing today in San Francisco.

``As we move from 300 mm to 450 mm, there will be a huge economic hurdle,'' said Gelsinger, a former chip designer who now heads Intel's largest business unit. ``There used to be hundreds of companies'' building fabrication plants, he said.

Intel's budget for new plants and equipment climbed to more than $7 billion in 2001 when it made its last big transition -- to 300 mm from 200 mm. Its budget is $5.2 billion this year.

Intel, based in Santa Clara, California, is the world's largest chipmaker by sales, followed by South Korea's Samsung. Taiwan Semiconductor, the largest contract manufacturer, makes chips for other companies.

In May, the three companies announced plans to ask equipment makers to provide products that can handle the new silicon wafers by 2012. Using the new machinery will let the companies cut their costs per chip by as much as 40 percent, Gelsinger said.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

Last Updated: June 30, 2008 20:31 EDT