International Business Machines Corp won a multiyear contract to build a new computer-graphics chip for Nvidia Corp, beating rival Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
Terms of the contract weren't disclosed. Semico Research Corp analyst Joanne Itow estimated the value at "several hundred million dollars." The chips will be built at IBM's plant in East Fishkill, New York, IBM spokesman Scott Sykes said.
IBM and rivals are winning more chip-manufacturing work as companies seek to avoid spending billions of dollars to build factories. IBM, which produces semiconductors for Apple Computer Inc and Motorola Inc, pioneered chip-making methods such as using more-efficient copper wires instead of aluminum. IBM's new techniques are drawing clients from rivals, analysts said.
"Technology is what's helping IBM win this business," Itow said. "Customers are turning to outsourcing their manufacturing, which is creating this whole new segment of the market."
Nvidia, which makes the semiconductors that power Microsoft Corp's Xbox video-game player, is the world's biggest maker of chips that create computer graphics. The company had used TSMC exclusively for five years, Nvidia spokesman Derek Perez said.
TSMC still will build Nvidia's older products, and Armonk, New York-based IBM is the only company making Nvidia's newest GeForce chip, he said.
In a statement Nvidia pointed out that TSMC will remain Nvidia's primary foundry partner. "TSMC remains a vital partner of Nvidia's and an integral part of our long-term strategy and success," stated Huang Jen-hsun (
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