Chipmaking Team Builds Next-Generation Prototype
08/29/06 - 07:16 PM EDT
Alexei Oreskovic
Intel(INTC Quote - Cramer on INTC - Stock Picks), the world's No. 1 chipmaker, recently began producing the majority of its microprocessors with 65-nanometer circuitry, the most advanced chip design available today, and plans to begin production at 45-nanometer in 2007.
In June, Texas Instruments announced that it had developed a manufacturing process for producing chips with 45-nanometer circuitry. TI said the chips will boost performance by 30% while providing longer battery life, and said they will be available in 2008. According to Len Jelinek, an analyst who covers semiconductor manufacturing for iSuppli, the real significance of the announcement is not that the coalition has developed a 45-nanometer manufacturing process; every major chipmaker is ultimately capable of achieving that goal. More important, Jelinek says, is the paradigm shift in chip manufacturing that this alliance may bring about. Three of the coalition partners provide foundry services, that is, they manufacture chips for semiconductor companies that don't have their own factories. Today, a firm must ensure that every factory it contracts with is capable of producing its chips successfully, a costly and timely process. Because the alliance has developed a so-called common platform for 45-nanometer semiconductors, a chip firm will be assured that it can have its chips produced at IBM, Chartered or Samsung's factories. "In one stroke, they qualify three factories. That's a pretty substantial cost savings," says Jelinek. It also means a chipmaker won't be as beholden to a single foundry, finding itself short of supply when the foundry's capacity is tight. The first successful 45-nanometer prototypes were produced at IBM's manufacturing facility in East Fishkill, N.Y., where the joint development team is based. The technology and process are expected to be installed and fully qualified at Chartered, IBM and Samsung's 300mm fabs by the end of 2007. According to Tuesday's announcement, kits are now available for firms to begin designing 45-nanometer chips with the new manufacturing process. Shares of IBM were up 64 cents at $80.86 in midday trading. Infineon was up 21 cents at $11.80, and Chartered gained 13 cents at $7.82.
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