IBM, AMD Team on Chip Technologies

Duo will focus on new processes to improve chip performance and reduce power consumption.

IBM and Advanced Micro Devices Inc. will jointly develop chip technologies, the two companies announced Wednesday.

The new processes will be aimed at improving chip performance and reducing power consumption, a key concern as more and more transistors are put onto the chips, which in turn creates a lot of heat.

The companies will collaborate on semiconductor manufacturing technologies on 65 and 45 nanometer chips and implemented on 300mm silicon wafers.

The work will be done at IBMs Semiconductor Research and Development Center in East Fishkill, N.Y.

Some of the new technologies the alliance will focus on include SOI (silicon-on-insulator) transistors, copper interconnects and "low-K dielectric" insulation, the companies said.

Bill Siegle, senior vice president for technology operations and chief scientist at AMD, said the company will start producing 90nm technologies in the fourth quarter this year. Now is the time to start looking at next-generation chips for 65nm and less, Siegle said in a prepared statement.

The alliance helps AMD, of Sunnyvale, Calif., keep pace with technology being created by rival chip maker Intel Corp., which tends to keep its developments secret and in-house, said Kevin Krewell, an analyst with In-Stat/MDR.

"Its a matter of AMD keeping up with Intel through partners, like leveraging their partnership with IBM here," said Krewell, in Sunnyvale.

Analyst Rob Enderle, of Giga Information Group Inc., in Santa Clara, Calif., said the deal obviously benefits AMD, "which in recent weeks looks like roadkill in front of the Intel juggernaut." But it also helps IBM, which is not widely viewed as a power in the chip industry.

"It gives each something much more now [vs. Intel] than they could do individually," Enderle said.

In September, AMD announced a similar partnership with United Microelectronics Corp., a Taiwan-based foundry, to develop chip-making processes at a jointly-built facility in Singapore, set to open in 2005.

The target date for getting the first products based on this alliance out in 2005 parallels the roadmap laid out by Intel, he said. The alliance with IBM gives AMD access to certain technologies, such as IBMs Strained Silicon, which aids in transistor reliability and also helps in developing energy-efficient chips, he said.

"The only downside to working with IBM is that IBM tends to be expensive," Krewell said.