Intel takes big step in foundry business

Altera, which with Xilinx dominates the market for programmable microchips, touted its pact with the world's top chipmaker as a major competitive advantage, as a slowdown in telecoms infrastructure spending continues to erode sales growth.

Altera Chief Executive John Daane said in a phone interview that Altera, which depends on communications infrastructure for about half of its business, is the only major programmable chipmaker that will have access to Intel's plants.

"We are essentially getting access like an extra division of Intel. As soon as they're making the technology available to their various groups to do design work, we're getting the same," he said.

Altera has been waiting for a pickup in spending by carriers in the United States and China. In the December quarter, its revenue fell 4 percent from the year-ago period.

In January, it forecast revenue would fall between 4 percent and 8 percent sequentially in the first quarter.

Shares of Altera were unchanged in extended trading after closing down 0.96 percent at $35.01. Xilinx was down about 0.9 percent at $37, versus a close of $37.30 on the Nasdaq.