This Taiwanese web-site reports that ATI has chosen United Microelectronics Corporation (UMC) to manufacture the up and coming code-named RV280 graphics processor at their capacities due to approximately 20% lower price UMC can offer compared to the rival TSMC.

UMC is said to start volume production of the RV280 GPU one of these days, while ATI plans to unveil their new graphics cards for mainstream and low-end market segments in the first quarter next year. The RV280 code-named chip is a slightly updated version of the popular RV250 (RADEON 9000) graphics processor, the only innovation of the newer version is AGP 8x support. Based on the market conditions, ATI may also consider to push the clock-speeds of the new solution up.

UMC always manufactures cheap GPUs for ATI, such as RADEON 7000 and so on. However, due to strong competition between ATI and NVIDIA in 2002, the Markham, Ontario-based semiconductor developer had to lower the prices on their higher-end GPUs made at TSMC. Therefore, the order ratio moved towards 7:3 favouring TSMC, who produces R200 and R300 chips using 0.15 micron technology and will make R350, RV350 and R400 graphics processors in 2003.

Since UMC manufacturing facilities’ utilisation is lower compared to TSMC’s, it is not surprising that they may offer lower prices in order to attract clients. As a result, they may eventually land other orders from other fabless semiconductor companies as well.