Wed, Mar 06, 2002 - Page 17 News List

TSMC announces venture

By Dan Nystedt  /  STAFF REPORTER

Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電), the world's largest contract chipmaker, said it would work with two of Europe's largest chipmakers to jointly develop state-of-the-art chip manufacturing processes that will lead to smaller, more versatile chips.

Royal Philips Electronics NV and STMicroelectronics NV, along with TSMC, said they had already produced the world's first working chips using tiny 0.09 micron chip etching technology -- beating out heavyweights like Intel Corp. TSMC expects to ramp production at 0.09 microns by the fourth quarter of this year and offer the technology to all its 500-plus clients.

The three firms plan to co-develop manufacturing processes to 0.065 and lower -- 1,000 times thinner than a strand of human hair -- to make smaller chips that conserve energy and perform more functions.

Such chips, dubbed "system on chip" (SOC), will be used in cellphones and PDAs with Internet and PC capability

When asked if TSMC would be barred from offering the new manufacturing process to competitors of Philips and STMicroelectronics, Rene Penning de Vries, deputy chief technology officer at Philips, said, "We believe the importance for the industry is the availability of the IP [intellectual property] ... by developing the IP we will have an advantage [over competitors using TSMC to manufacture their chips]," Penning de Vries said. TSMC's competitors, however, will be barred from using the manufacturing processes, according to Tzeng Fan-cheng (曾繁城), deputy CEO of TSMC.

United Microelectronics Corp (UMC, 聯電) stands to lose a longstanding customer in STMicroelectronics, a partner in the joint development plan. STMicroelectronics still has three years remaining on a multi-year agreement with UMC. "We will continue to execute our existing agreements but our R&D agreement with TSMC is active today and we're very positive about it," said Mike Thompson, vice president of R&D at STMicroelectronics.

UMC put out its own news release stating "it is our understanding that this joint development program does not include any volume commitment for foundry outsourcing ... we are confident that the relationship between our companies will continue to prosper."

Philips, Europe's largest electronics maker, has long worked with TSMC, being an original shareholder in the company and owner of 24 percent of TSMC's stock.

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