UMC Breaks TSMC Monopoly in iPhone Chip Foundry

Taipei, April 17, 2008 (CENS)--Infineon Technologies will contract United Microelectronics Corp. (UMC) to make the 65nm base-band chips it designs for 3G version of Apple iPhone, ending Taiwan Semiconductor Manufacturing Co.'s (TSMC's) monopoly in foundry manufacturing of iPhone chips.

The German chipmaker has placed foundry orders for frequency chips used in first-generation iPhones with TSMC, which uses 90nm process to make the chips. Insiders pointed out Infineon decides to farm out the production contract to UMC, the No.2 pure silicon foundry, out of cost concern. They estimated Infinenon will maintain production of the 90nm analog frequency chips at the No.1 foundry player.

Taiwanese industry watchers pointed out that the latest contract represents 65nm market is growing mature and competition in market of leading-edge processes will become more intensive.

In the meantime, Infineon will entrust chip assembler Siliconware Precision Industry Co., Ltd. to package and test its chips.

Apple plans to introduce the latest version of its iPhone some time next month and begin delivering the phone in big volume in June. Industry watchers estimated the rollout to help propel shipments of iPhones of various copies to three million systems throughout this quarter and five to eight million systems next quarter, thereby helping drive up revenues of Taiwan's high-tech industry.

The latest version supports 3G specs and is dubbed as "iPod Phone". It comes with relatively enormous capacity for transmitting data-intensive files, winning it the title of next generation killer appliance.

Other Taiwanese subcontractors of the phones include Hon Hai Precision Industry Co., Ltd., Cheng Uei Precision Industry Co., Ltd., Foxconn Technology Co., Ltd., TXC Corp., and Largan Precision Co., Ltd.