The nation's largest chip designer, VIA Technologies Inc (威盛電子), has chosen US computer giant International Business Machines (IBM) Corp to manufacture the next generation of its most advanced processors rather than its traditional partner, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the company said in a statement yesterday.
IBM's chip manufacturing plant, or foundry, in New York state is expected to produce VIA's first chips with transistors measuring just 90 nanometers (nm) across in the second half of this year, the statement said.
VIA's switch to IBM does not indicate that the world's largest manufacturer of chips to order is lagging in technology, analysts said yesterday.
"I don't believe this is an indication that TSMC's 90nm process is not mature enough," said Chris Hsieh (
Benny Lo (盧志恆), an analyst with Primasia Securities Co, agreed, adding that IBM has advantages over TSMC only in niche areas. Even TSMC chairman Morris Chang (張忠謀) conceded at the company's most recent investor conference that IBM did indeed have more advanced technology in certain limited areas, and that this would persuade some TSMC customers to make the switch to IBM. Chang said that the same customers would continue to do the majority of their manufacturing at TSMC.
VIA shares gained NT$1.10, or 2.5 percent, to close at NT$44.50 on the TAIEX yesterday, after the company said that it had selected IBM as a foundry partner for its next-generation processors, dubbed Esther.
The chip industry is packing more and more transistors onto each piece of silicon as products from computers to mobile phones and flat-screen televisions need to process more data, especially advanced graphics.
The decrease from the current standard transistor width of 130nm to 90nm, or one thousandth the width of a human hair, reduces power consumption by reducing the distance signals need to travel within the chip, while increasing the performance of the chip.
With faster processing speeds, VIA aims to compete more readily with rivals like Intel Corp and Advanced Micro Devices (AMD).
VIA is also banking on a computing platform built from components that it has designed, also known as an embedded platform, for improved sales this year.
"VIA believes its embedded platform division is breaking even," Hsieh said. "Breaking even is not a bad result for a new division."
But VIA's core business is still chips, both the main processor or brains of a computer and the chipset, which operates like the body's central nervous system.
"VIA is hoping its embedded solutions will be a major revenue driver in 2004, but we didn't see it as expected in 2003," Lo said. "Chipsets still constitute more than 70 percent of VIA's revenue, so VIA needs to see an improvement in the average selling price of chipsets."
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