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Intel’s chip making for rivals a double-edged sword

Reuters Breakingviews delivers agenda-setting financial insight. Its global correspondents react to stories as they develop, delivering sharp and provocative commentary on big financial news as it breaks.

Intel faces a quandary in making chips for rivals. Offering this service on a limited basis to companies like Altera is close to a free lunch. It helps Intel maximize manufacturing capacity and defray costs: building a semiconductor plant costs $10-billion. Expanding this business too far, however, could threaten margins.