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IBM to Make Next-Generation Nvidia Chip
Mar 26, 4:28 am ET
NEW YORK/TAIPEI (Reuters) - International Business Machines Corp. (IBM.N) said on Wednesday it will make a new graphics chip for Nvidia Corp. (NVDA.O), winning business that otherwise would have gone to Taiwan Semiconductor Manufacturing Co. (2330.TW)(TSM.N).
Nvidia, a Santa Clara, California chip designer, has in the past has turned only to TSMC, the world's largest contract chip manufacturer, to produce the Nvidia chips used in Microsoft Corp.'s Xbox game console, personal computers, laptops and workstations.
TSMC declined to comment directly on the deal, but said in a joint statement with Nvidia that it remained the primary manufacturing partner for the chip design house.
News of the IBM-Nvidia deal came late in the Taiwan stock market's trading day and analysts said the market did not fully digest it. TSMC's Taipei shares rose 0.86 percent, against a 0.06 percent fall in the TAIEX (.TWII) share index.
As recently as November, Nvidia executives told Reuters it had no plans to switch its manufacturing from TSMC but said that it might work with other foundries, or contract chip makers, at some point.
Armonk, New York-based IBM, the world's largest computer company, would make the chip in its state-of-the-art, $2.5 billion East Fishkill, New York chip plant, IBM said on Wednesday.
Terms of the deal were not disclosed and Nvidia declined to comment on which chip would be produced at IBM's plant.
The plant uses the latest chip-making technologies, such as the larger dinner-plate sized 300 millimeter wafers that are more efficient because they can fit more chips on them than the standard salad-plate sized 200 millimeter wafers.
IBM STARTS NVIDIA CHIP IN SUMMER
IBM plans to start making the Nvidia chip this summer.
IBM is trying to fill its plant with orders from outside companies as it brings the facility into production this year. It has signed deals with other firms such as contract manufacturer Chartered Semiconductor Manufacturing Inc.(CHRT.O) and chip maker Xilinx Corp.(XLNX.O).
Unlike IBM, TSMC has no products of its own and only manufactures on behalf of other firms.
However, TSMC chairman Morris Chang said last week he considered IBM to be a competitor, surprising some industry watchers who do not usually consider the two firms to be in the same field.
Financial analysts speculated over the last year that Nvidia might seek to shift business from TSMC to IBM.
Until late last year, Nvidia had settled into a regular pattern of announcing and then quickly releasing a new generation of chips every six months, which had allowed it to keep the high-performance crown away from rival ATI Technologies Inc (ATY.TO).
But that pattern was broken in 2002, when Nvidia unveiled the GeForce FX line in November, as much as three months later than some had expected. The highest-end chip in that line, the GeForce FX 5800 Ultra, began appearing in limited quantities at retail just this month.
"As our graphics processors continue to push the envelope and require the best in semiconductor processing technology, we look forward to building our next generation of graphic GPU (graphics processing unit) products, including GeForce, with them," the joint TSMC-Nvidia statement quoted Nvidia's president as saying.
In 2003, Nvidia stock has risen 20 percent, compared to a 16 percent rise for ATI, as it has unveiled a number of new chips in the GeForce FX line for mainstream and low-cost PCs.
(Additional reporting by Michael Kramer in Taipei and Ben Berkowitz in Los Angeles)
Mar 26, 4:28 am ET
NEW YORK/TAIPEI (Reuters) - International Business Machines Corp. (IBM.N) said on Wednesday it will make a new graphics chip for Nvidia Corp. (NVDA.O), winning business that otherwise would have gone to Taiwan Semiconductor Manufacturing Co. (2330.TW)(TSM.N).
Nvidia, a Santa Clara, California chip designer, has in the past has turned only to TSMC, the world's largest contract chip manufacturer, to produce the Nvidia chips used in Microsoft Corp.'s Xbox game console, personal computers, laptops and workstations.
TSMC declined to comment directly on the deal, but said in a joint statement with Nvidia that it remained the primary manufacturing partner for the chip design house.
News of the IBM-Nvidia deal came late in the Taiwan stock market's trading day and analysts said the market did not fully digest it. TSMC's Taipei shares rose 0.86 percent, against a 0.06 percent fall in the TAIEX (.TWII) share index.
As recently as November, Nvidia executives told Reuters it had no plans to switch its manufacturing from TSMC but said that it might work with other foundries, or contract chip makers, at some point.
Armonk, New York-based IBM, the world's largest computer company, would make the chip in its state-of-the-art, $2.5 billion East Fishkill, New York chip plant, IBM said on Wednesday.
Terms of the deal were not disclosed and Nvidia declined to comment on which chip would be produced at IBM's plant.
The plant uses the latest chip-making technologies, such as the larger dinner-plate sized 300 millimeter wafers that are more efficient because they can fit more chips on them than the standard salad-plate sized 200 millimeter wafers.
IBM STARTS NVIDIA CHIP IN SUMMER
IBM plans to start making the Nvidia chip this summer.
IBM is trying to fill its plant with orders from outside companies as it brings the facility into production this year. It has signed deals with other firms such as contract manufacturer Chartered Semiconductor Manufacturing Inc.(CHRT.O) and chip maker Xilinx Corp.(XLNX.O).
Unlike IBM, TSMC has no products of its own and only manufactures on behalf of other firms.
However, TSMC chairman Morris Chang said last week he considered IBM to be a competitor, surprising some industry watchers who do not usually consider the two firms to be in the same field.
Financial analysts speculated over the last year that Nvidia might seek to shift business from TSMC to IBM.
Until late last year, Nvidia had settled into a regular pattern of announcing and then quickly releasing a new generation of chips every six months, which had allowed it to keep the high-performance crown away from rival ATI Technologies Inc (ATY.TO).
But that pattern was broken in 2002, when Nvidia unveiled the GeForce FX line in November, as much as three months later than some had expected. The highest-end chip in that line, the GeForce FX 5800 Ultra, began appearing in limited quantities at retail just this month.
"As our graphics processors continue to push the envelope and require the best in semiconductor processing technology, we look forward to building our next generation of graphic GPU (graphics processing unit) products, including GeForce, with them," the joint TSMC-Nvidia statement quoted Nvidia's president as saying.
In 2003, Nvidia stock has risen 20 percent, compared to a 16 percent rise for ATI, as it has unveiled a number of new chips in the GeForce FX line for mainstream and low-cost PCs.
(Additional reporting by Michael Kramer in Taipei and Ben Berkowitz in Los Angeles)
