AMD and IBM announced that the companies have entered into an agreement to jointly develop chip-making technologies for use in future high-performance products. The new processes, developed by AMD and IBM, will be aimed at improving microprocessor performance and reducing power consumption, and will be based on advanced structures and materials such as high-speed silicon-on-insulator (SOI) transistors, copper interconnects and improved “low-k dielectric” insulation.

The agreement includes collaboration on 65 and 45nm technologies to be implemented on 300mm silicon wafers. AMD and IBM will be able to use the jointly-developed technologies to manufacture products in their own chip fabrication facilities and in conjunction with selected manufacturing partners. The companies expect first products based on the new 65nm technologies to appear in 2005.

It seems that IBM wants to form some kind of “semiconductor alliance” with numerous rather successful semiconductor makers because in late November 2002 IBM announced the agreement with Chartered Semiconductor (see this news-story). Under the terms of this settlement, the companies plan to jointly develop and align on 90nm and 65nm logic processes for foundry chip production on 300mm silicon wafers. They may explore an extension to the agreement to include 45nm technology. What also seems to be important is that IBM and Chartered agreed to work together with third-party providers of design tools and open-standard formats to help their customers more easily move their products between the two companies for production.

Such collaborations do not only reduce research and development costs, but also allow different companies to utilise manufacturing facilities of each other. For instance, AMD simply cannot produce a sufficient number of microprocessors in order to be able to compete with Intel in terms of quantity. With every successful microprocessor they have to work really hard in order to push it on the market. Since Intel can supply all personal computer vendors of the world with their CPUs and also offers a lot of benefits to their biggest partners, the latter do not want to start using a lot of AMD processors since Intel may stop providing discounts, what will cause a lot of troubles, as vendors cannot be sure that AMD is able to sell them enough CPUs. Moreover, it becomes a critical task to be presented in all market segments in order to be successful in, at least, one of them. In fact, the problem is seen even now: if AMD was able to sell a lot of Athlon XP 2800+ chips, they would also be able to sell more of their lower-end microprocessors. So, eventually AMD may have some chances to expand their manufacturing capabilities even further not just with UMC, but maybe even with IBM and Chartered.

The development will be supported by AMD and IBM engineers working together in IBM’s Semiconductor Research and Development Center (SRDC) in IBM's East Fishkill, New York facility. Work is expected to begin by January 30, 2003.