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Sun Microsystems' Contract Marks TSMC's Milestone Into CPU Foundry

Taipei, Sept. 8, 2009 (CENS)--By wining a significant contract recently to build a family of server-used high-performance central processing units (CPUs) using 40-nanometer process technology for Sun Microsystems Inc., Taiwan Semiconductor Manufacturing Co. (TSMC) has eventually cracked CPU foundry market.

TSMC has long depended on non-CPUs foundry contracts for most of its revenue. According to industry watchers, Sun Microsystems has contracted TSMC to make its Rainbow Falls family of CPUs using 40nm process. The microprocessors are noted for their 16 cores per chip, along with extended, glueless node-to-node coherent interconnects.

Sun recently unveiled the processors at a prominent semiconductor-technology forum named Hot Chips. TSMC, currently the world's No.1 foundry supplier, will begin volume production of the chips sometime next year.

The two companies announced partnership in February last year, with Sun pledging to contract TSMC to make its older products like UltraSPARC processors and next-generation products including the Rainbow Falls.

Sun shifted partnership to TSMC from Texas Instruments (TI), which had made most of Sun's chips, on ground that TI has stopped developing leading-edge process technologies including 40/45nm nodes and below.

Industry watchers estimated TSMC's 40nm yield rate to cross 85% next year, making the process the foundry's major growth driver next year. They also forecast the foundry's 2010 revenue to grow at annual rate of 25% in light of swarming orders that will keep its production lines running at full capacity into next quarter.

To cope with busy capacity, the company has decided to hike capital expenditure to US$2.4 billion from previously planned US$1.5 billion. The spending is estimated at US$3 billion for next year.

(by Ken Liu)
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