Intel has agreed to start manufacturing programmable chips for Altera in its first outside large-scale manufacturing deal, which could lead to contracts with firms like Apple.
The world's top chipmaker had already started offering space in its manufacturing plants to smaller firms like Tabula and Achronix Semiconductor, but the deal with Altera, which mostly creates product for communications infrastructure, is potentially a lot bigger.
Intel is trying to keep its fabs busy as the traditional PC chip market continues to slow and has also said that it will consider manufacturing for certain customers as long as they're not in direct competition with Chipzilla.
"It's a step in terms of building into a business level we wish to achieve," Sunit Rikhi, veep and GM of Intel's custom foundry, told Reuters. "There's no doubt in my mind the foundry will be a significant player in the future."
As Intel's Ultrabook brand push fails to reap big dividends and it struggles to break into smartphones and tablets with its own processors, some investors think that the firm will eventually consider making chips for Apple's iDevices.
"If and when we are called upon to serve large mobile customers who can drive a lot more volume, we could serve them today in terms of capability," Rikhi said, refusing to be drawn on specifics. "I'm confident we have a very strong platform of offering upon which we can scale."
The company said it will make Altera's field-programmable chips (FPGAs) using its 14-nanometer trigate transistor technology. ®