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By Mark Hachman  |  Posted 2004-06-25 Print this article Print

To date, IBM has filled a special niche in the manufacturing industry. In the late 1990s, IBM served as a key foundry for National Semiconductor Corp.s Cyrix X86 processor division, keeping half of the Cyrix MII and 686MX wafers it produced for Cyrix and reselling them on the open market as IBM-branded chips. A year later, after National and Integrated Device Technology Ltd. sold off their X86 chip divisions to Via Technology Inc., IBM pulled back from the foundry business, concentrating on manufacturing wafers based on its own chip designs. In January 2003, however, IBM delicately re-entered the merchant chip world by announcing an agreement with AMD to co-develop process technology at the 65-nm and 45-nm manufacturing nodes. The deal did not involve a foundry component, unlike the agreement struck with graphics chip maker Nvidia Corp. two months later, in March. The two companies agreed that IBM would produce the Nvidia GeForce 6800 graphics chip at IBMs new $1.5 billion, 300-mm wafer fab in East Fishkill, N.Y. After being delayed for about two months, Nvidia representatives said that add-in cards based on the chips would begin shipping this month.
A senior executive at one electronics distributor said the shortages were being used to advantage by customers. To date, the majority of the Nvidia cards announced have been from the "Ultra" series, aggressively clocked to appeal to the high-end gaming market. "Their 6800 Ultra is what gamers want," the executive said. "Theyre willing to pay anything for extreme anything. Its bragging rights. Theyre obsessed with the high end of the market. Thats where the money is."
The PowerPC 970FX and Nvidia 6800 chips are manufactured in the same 300-mm IBM wafer fab in East Fishkill, IBM spokesman Christopher Andrews confirmed. Taiwans Via Technologies has also agreed to use IBMs fabs to produce its low-power C5J "Esther" X86 microprocessor core. In January, when the manufacturing relationship was disclosed, Via said Esther was expected in the second half of this year. In May, Via disclosed more details about the chip, including the expected 2GHz clock speed, removing the chips expected ship date from its announcement. However, officials at the chipmaker said theyre still on track. "As far as Im aware, were not experiencing any particular issues moving to IBM and are pretty much on schedule," said Richard Brown, Vias director of worldwide marketing. "IBM really hasnt had a tradition of heavy emphasis on high-volume manufacturing," Brookwood said. "Theyve always emphasized advanced technology first, to be first to market in advanced technology rather than high volume. Intel or Texas Instruments has been much better in ramping high-volume products. Its a different discipline; theres some learning to be done. As a result, some of the people that went to [IBM] on 90 nm and asked them to ramp their products quickly have been disappointed." Check out eWEEK.coms Macintosh Center at for the latest news, reviews and analysis about Apple in the enterprise.

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