VIA Technologies, one of the world’s largest chipset designers also less known as x86 CPU developer, today unveiled plans to use IBM’s 90nm process technology for producing its next-generation microprocessors code-named “Esther” in the second half of the year.

VIA’s decision to partner with IBM was based on the company’ success in creating advanced silicon manufacturing technologies, such as copper interconnects, silicon-on-insulator (SOI) and low-k dielectric insulation, together with its 90nm process. These advanced manufacturing technologies are designed to reduce power consumption and allow processor speeds of 2GHz and beyond within the same thermal envelope as current VIA processors, according to Taipei, Taiwan-based company.

Esther processors from VIA are also known as Cyrix 4. The chip is anticipated to run at speeds around 2GHz and will sport SSE2 technology originally developed by Intel Corp.. According to information from unofficial sources, the part will have large 128KB L1 cache and 256KB of L2 cache, therefore, will hardly incorporate significantly more than 50 million of transistors.

What is not exactly clear about the Esther central processing unit from VIA is its bus. According to a settlement between VIA and Intel signed in 2002, the former further agreed for a period of three years not to assert its patents on VIA bus or pin compatible microprocessors. Since the agreement may expire in 2005, VIA may need to prolong it, develop its own bus, or create a chip compatible with non-Intel infrastructure.

The next generation “Esther” core processors will be manufactured at IBM, while the Taiwan Semiconductor Manufacturing Corporation (TSMC) will continue to produce VIA’s existing processor lines as well as market-leading core logic chipsets and advanced communications, networking and multimedia solutions.

Even though VIA commands less than 2% of x86 CPU market, its intentions to collaborate with IBM instead of TSMC in producing 90nm CPUs may be an alarming sound for the Taiwanese contract semiconductor manufacturer, as a number of companies, such as graphics chip firm NVIDIA Corp., also aim to make their high-end devices in IBM’s East-Fishkill, NY, facility.

An ironic fact about the deal is that Cyrix – a subsidiary of National Semiconductor acquired by VIA a number of years ago to develop VIA’s CPUs – utilized IBM’s manufacturing facilities for building its x86 products in the nineties. x86 CPU business was not a success for National, who constantly complained about IBM’s too high cost of manufacturing, and was sold to VIA, who outsourced silicon manufacturing to TSMC in an attempt to lower the cost of its chips.

In early December 2003 VIA’s CEO Wenchi Chen said the firm’s CPU division is likely to see profit in 2004.