Fri, Mar 26, 2004 - Page 10 News List

TSMC loses some Atheros orders to Chinese rival SMIC

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Semiconductor Manufacturing International Corp (中芯國際集成電路), China's biggest chipmaker, won supply orders for Atheros Communications Inc, securing business that previously was exclusive to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).

Atheros, which makes wireless-communications products, began buying chips from Shanghai-based Semiconductor Manufacturing a few months ago to cut costs, chief executive Craig Barratt said in an interview in Taiwan.

"Semiconductor Manufacturing can allow us to get lower prices for some of our products," he said.

TSMC, the world's biggest supplier of made-to-order chips, sells silicon wafers for about 60 percent more than Semiconductor Manufacturing, according to the two companies' statements. Semiconductor Manufacturing, which sold its first shares publicly last week, was accused in a US court Wednesday by the Taiwan rival of stealing chip-making technology.

Semiconductor Manufacturing in the fourth quarter sold silicon wafers for an average price of US$910, based on a statement by the company before its share sale.

TSMC's average price was about US$1,450, the company said in its earnings announcement for the same period.

Sunnyvale, California-based Atheros will make chips for wireless communications that conform to standards set by China for security, Barratt said. Atheros doesn't yet have technical specifications for the chips.

"We completely understand the needs of countries to regulate standards," Barratt said. "Our goal is to support our customers in China."

He declined to name customers in China.

China on March 11 said it won't back down on a plan to force computer makers to adopt a new standard for encrypting wireless communications after Intel Corp said it will halt sales of its Centrino chip package in the nation.

Intel, the world's biggest chipmaker, will stop sales of the wireless communication device after balking at government demands for alterations before June 1. A quarter of all laptops sold in China last year used the chip.

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