Intel Vice President Zane Ball, who oversees the company's foundry business, told developers in mid-August that the U.S. chipmaker can offer a better service than its rivals because it is not just a chip producer.

"We can do design, and we can do assembly and test. We have remarkable sources and we will bring these capabilities to our customers as well." Ball added that with ARM's licensing support, Intel is able to do more in the mobile chip sector.

The move by Intel to promote its foundry business is an attempt to compensate for an ongoing decline in the PC chip market. For the three months ended in June, Intel's net profits halved to $1.3 billion from a year ago though its revenue rose 3% to $13.5 billion.

Intel is currently making only $100 million annually from its foundry business, with a limited number of customers including Chinese mobile chip designer Spreadtrum Communications, a key rival to Qualcomm of the U.S. and MediaTek of Taiwan. Intel has a 20% stake in Spreadtrum.

Up until now, the Santa Clara, California-based company has mostly stuck to designing, producing and marketing chips under its own brand.

Yet with its colossal size, it could still pose serious threats to rivals in the foundry market. Founder and Chairman of TSMC, Morris Chang, said in June that Intel is a potential rival for his company in the longer term.

Intel, TSMC, and Samsung Electronics are the world's three leading chipmakers, and the only players capable of spending big sums to develop cutting-edge semiconductor technology and build advanced production facilities.

They will allocate $9.5 billion, $10 billion, and $11 billion respectively for capital expenditure in 2016, according to research firm IC Insights.

TSMC currently controls 55% of the global foundry market, and also accounts for 55% of global smartphone chip production.

For 2016 and 2017, TSMC is reportedly monopolizing orders for iPhone core processors, while it still had to share Apple business with Samsung in 2015.

Last year, TSMC booked revenue of 843.5 billion New Taiwan dollars ($26.61 billion) from making chips for 470 customers worldwide including Apple, Qualcomm, Nvidia of the U.S., MediaTek, and Huawei of China's chip arm Hisilicon Technology.

Apple contributed to 16% of TSMC's revenue in 2015 and that is expected to increase to around 20% this year.

TSMC spokesperson Elisabeth Sun said competition was always out there and the Taiwanese chipmaker would continue to provide the best services to customers.

"TSMC's mission is to provide the world's No.1 foundry services to customers and we will keep doing that," Sun told the NAR.

By: DocMemory
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