Altera announced an agreement with Intel Corp on Monday for the manufacture of its programmable chips using Intel's cutting-edge 14 nanometer technology, gaining an edge over rivals by accessing industry-leading chipmaking technology.
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 gains a tremendous competitive advantage at the high end in that we are the only major (programmable chip) company with access to this technology," Altera said in a press release on Monday.
Altera, which depends on communications infrastructure for about half of its business, 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.
(Reporting By Noel Randewich; Editing by Gary Hill and Leslie Adler)