Intel Signs Up Panasonic as Foundry Business Customer

Intel Corp. (INTC), trying to steal orders from Taiwan Semiconductor Manufacturing Co. and expand the use of its plants, said it signed up Panasonic Corp. as a customer in its biggest win so far for its chip-production effort.

Panasonic’s chip division will use Intel to make system-on-chip products on the U.S. company’s 14-nanometer technology, which is the most recent type of manufacturing process for semiconductors, Intel said in a statement today.

Intel Chief Executive Officer Brian Krzanich, a former factory manager, is trying to get the Santa Clara, California-based company into the foundry business to produce chips for others. That business, dominated by TSMC, is growing as semiconductor manufacturing costs rise and companies increasingly outsource their production.

Panasonic is the biggest customer announced by Intel in the effort. Intel will make chips that go into audio-visual equipment for the Japanese company, according to the statement. Intel has signed five other customers, including Altera Corp., the company said.

Krzanich, who was promoted to CEO in May 2013, broke with his predecessors in saying he would consider letting competitors take advantage of Intel’s plants. The company, whose own designs power more than 80 percent of personal computers, is seeking growth in new businesses as the PC market declines for a third straight year.

Intel shares fell less than 1 percent to close at $31.03 in New York. The stock is up 20 percent this year.

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

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Jillian Ward

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