Intel Takes On Chip-Production King Taiwan Semiconductor

Setting the stage to win some of Apple’s business
Silicon wafers made by Taiwan Semiconductor Manufacturing Co. on Jan. 16, 2013 Photograph by Maurice Tsai/Bloomberg

Like most Silicon Valley chip-design specialists, Altera has long adhered to a trusted formula: Design semiconductors at home; produce them in Asia. For the San Jose (Calif.)-based company, which sells phone-equipment processors, that’s meant outsourcing production to Taiwan Semiconductor Manufacturing Co., whose cutting-edge chipmaking plants save customers the $4 billion or more it’d cost to build their own. TSMC is the leader in the $39.3 billion contract manufacturing industry for chips—the so-called foundry business—taking roughly $7 per smartphone sold.

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