Intel's (INTC) Foundry Gains are a Negative for Taiwan Semiconductor (TSM) - Analyst

February 26, 2013 7:25 AM EST
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News after the close that Altera (Nasdaq: ALTR) will become a foundry customer for Intel (Nasdaq: INTC) is an "incremental negative" for Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) (NYSE: TSM), according to RBC Capital analyst Doug Freedman. The analyst said more companies could transition toward Intel's advanced processes and away from TSMC.

In a comment to, Intel characterized its foundry efforts as "moving from the crawling phases of our business to the walking phase."

TSMC, for its part, is trying to quell any market concerns. In a joint statement with Altera the two reaffirmed their commitment to a long-term partnership to set new milestones in FPGA innovation. TSMC remains Altera's primary foundry.

"Over the course of our 20-year collaboration, Altera and TSMC have achieved many industry milestones that have greatly benefitted both companies," said John Daane, president, CEO and chairman of Altera. "TSMC remains an important part of our future product development. We look forward to continuing our close partnership to jointly develop technologies for next-generation products."

Despite the comments, Intel's inroads should be a concern.

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