Motorola Inc, the world's seventh-largest chipmaker, said yesterday it had reached an agreement to outsource a significant number of new chip products to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
The US firm adopted an "asset light" policy after its sales plummeted by over a third to US$4.9 billion last year amid the worst downturn in semiconductor history.
The downturn pushed a number of companies including US-based Advanced Micro Devices Inc and Conexant Systems Inc to shift production to companies like TSMC and rival United Microelectronics Corp (UMC,
"It's positive for TSMC," said Rick Hsu (
Motorola is already a top-10 customer of TSMC, accounting for up to 4 percent of the chip foundry giant's revenue in the first quarter of this year, according to Hsu. He said Motorola's "asset light" strategy calls for reducing the number of its own fabs from around 15 at the end of last year to just eight within the next few years.
As it taps TSMC and other "foundry" chipmakers to produce its chips, Motorola's semiconductor division will focus more on pure research and development. Foundry chipmakers build and operate immense semiconductor fabs to make chips designed by customers.
A statement released by Motorola said the expanded partnership "will result in a significant portion of Motorola's outsourced semiconductor manufacturing being provided by TSMC."
It includes cutting-edge manufacturing processes that command higher prices, including leading CMOS (complementary metal-oxide semiconductor) technology, which Motorola said "will be crucial to producing Motorola's system-on-chip products for high-end applications."
System-on-chip products are a wave of the future, combining the functions of many chips onto just one.
Motorola said it will join a technology alliance announced last March by TSMC, Royal Philips Electronics NV and ST Microelectronics NV to develop production technology at tiny levels of 90 nanometers and below, more than 10,000 times thinner than a strand of human hair.
Bill Walker, senior vice president of Motorola's semiconductor products division, said the relationship with TSMC ensures Motorola of a steady supply of external chip production capacity without adding new fabs of its own. The company has learned to rely on TSMC and other foundries for manufacturing services over the past decade and expects to increase outsourcing in the future.
The chiefs of the two largest foundry chipmakers in the world, TSMC's Morris Chang (
"In anticipation of this agreement, TSMC earlier this year increased its 2002 capital appropriation to US$2.5 billion for projects including expansion of 12-inch manufacturing capacity at Fabs 12 and 14," said TSMC president Rick Tsai (
"Our total manufacturing capacity is expected to nearly double to 8 million wafers by the end of 2006, allowing us to easily satisfy the immediate and future needs of Motorola and all of our foundry customers around the globe," he said.
PROTECTIONISM: China hopes to help domestic chipmakers gain more market share while preparing local tech companies for the possibility of more US sanctions Beijing is stepping up pressure on Chinese companies to buy locally produced artificial intelligence (AI) chips instead of Nvidia Corp products, part of the nation’s effort to expand its semiconductor industry and counter US sanctions. Chinese regulators have been discouraging companies from purchasing Nvidia’s H20 chips, which are used to develop and run AI models, sources familiar with the matter said. The policy has taken the form of guidance rather than an outright ban, as Beijing wants to avoid handicapping its own AI start-ups and escalating tensions with the US, said the sources, who asked not to be identified because the
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
Her white-gloved, waistcoated uniform impeccable, 22-year-old Hazuki Okuno boards a bullet train replica to rehearse the strict protocols behind the smooth operation of a Japanese institution turning 60 Tuesday. High-speed Shinkansen trains began running between Tokyo and Osaka on Oct. 1, 1964, heralding a new era for rail travel as Japan grew into an economic superpower after World War II. The service remains integral to the nation’s economy and way of life — so keeping it dazzlingly clean, punctual and accident-free is a serious job. At a 10-story, state-of-the-art staff training center, Okuno shouted from the window and signaled to imaginary colleagues, keeping
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
RSS