Churning out chips


For more than 30 years, Intel Corp. has dominated chip making, producing the most important component in the bulk of the world’s computers. However, according to Bloomberg¸ that run is now under threat from a company many Americans have never heard of.

Taiwan Semiconductor Manufacturing Co. (TSMC) was created in 1987 to churn out chips for companies that lacked the money to build their own facilities. The approach was famously dismissed at the time by Advanced Micro Devices Inc. (AMD) founder Jerry Sanders. "Real men have fabs," he quipped at a conference, using industry lingo for factories.

These days, ridicule has given way to envy as TSMC plants have risen to challenge Intel at the pinnacle of the $400 billion industry. AMD recently chose TSMC to make its most advanced processors, having spun off its own struggling factories years before.

TSMC’s threat to Intel reflects a sea change in chip making that’s seen one company after another hire TSMC to manufacture the chips they design. (Source: Bloomberg)

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