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Intel's Success Came With Making Its Own Chips. Until Now.

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The Silicon Valley pioneer is considering outsourcing.

Credit: L.J. Davids/Getty Images

Intel Corp., more than any other company, represents the historical silicon in "Silicon Valley." It has held its reign not only by designing compelling new circuitry but also by etching it into silicon at its own factories.

It was orthodoxy inside Intel. To thrive, it had to remain the maker of its flagship chips that are the brains of computers—long after many rivals had outsourced manufacturing and stuck to design.

So on July 23, when Chief Executive Bob Swan on an earnings call said Intel would consider outsourcing the manufacture of some of its most advanced chips, it was a milestone in the story of America's losing its manufacturing primacy. Intel's plants had stumbled for the second time in a row in making the circuitry that underlies a new generation of chips called central processing units, or CPUs, each with tinier transistors than the one before. It had needed to scrap much of what its factories had made during trial runs and push back the promised delivery time frame. Intel would now reconsider how to make its chips that hit the market in the year 2023 and later, Mr. Swan said.


From The Wall Street Journal

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