ATI NVIDIA Buy TSMCs 40nm Process Foundry Service

Nvidia and AMD-ATI, currently the world`s top two vendors of graphic accelerators, will contract Taiwan Semiconductor Manufacturing Co. (TSMC) to build chips with 40-nanometer process next quarter, while Altera, Broadcom and Netlogic plan to do the same in the ensuing quarter.

TSMC announced last month that it would begin offering commercialized 40-nm process, with many fabless houses having since come to TSMC for the leading-edge process in spite of the business downturn.

The world`s No.1 silicon-foundry supplier announced in March it had unveiled the process by using immersion lithography technology. Chip-making equipment suppliers pointed out that TSMC had completed validation of the process with customers last month before announcing to offer such commercialized process.

In spite of anemic chip markets and the forecast that TSMC`s capacity utilization ratio will likely drop to only 75% by the end of the current quarter, customers have accelerated plans to upgrade to higher-end process by making most of the rising idle capacity at TSMC in hope of paring down costs.

Nvidia plans to have its high-end GT216 chips made using 40-nm process next quarter, as does AMD-ATI, which is working on its high-performance RV870 chip designed on 40-nm rule.

Telecom-chip designers including Altera, Broadcom, Marvell, Netlogic and LSI are planning to use 40-nm process to make chips in the second quarter next year. Suppliers of the chips used in Microsoft XBox360 game consoles, and Sun Microsystems are reportedly considering to contract TSMC by the middle of next year [via cens].