Intel Agrees to Buy Altera for $16.7 Billion

Intel, the world’s largest maker of chips, said it would pay $16.7 billion for a chip company called Altera.

Intel hopes to pick up customers, flexibility and a way to keep its manufacturing going at full speed. Altera was losing profitability, in part from higher development and sales costs. It was the latest in a series of big mergers in the business, pointing to a consolidation, particularly among American manufacturers that came up making chips for things like personal computers and basic networks.

Computers stuffed with superfast chips are going everywhere: home appliances, cars, smartphones and giant data centers. This creates rich opportunities for makers of semiconductors, vastly increasing the number of places they can sell ever-smaller chips. But even as the demand for chips expands, the business has become ruinously expensive for all but the biggest players, and that is causing a multibillion-dollar frenzy.