Nvidia Corp. and Taiwan Semiconductor Manufacturing Company (TSMC) said in a statement that the world’s leading contract semiconductor manufacturer have shipped the millionth processor designed by Nvidia and manufactured by TSMC. In the same note the companies said that TSMC was already producing Nvidia’s chips using 65nm process technology.

Nvidia and TSMC began high-volume production in 1998 when Nvidia was developing processors on the 0.35 micron (350nm) technology node. Today, Nvidia still manufactures the vast majority of its processors using TSMC’s capacities and “is producing processors on the 65nm node” in TSMC’s 300mm fabs, the companies announced, but did not elaborate which chips are made using the new fabrication process.

Usually production of graphics processors begins months before the official unveiling. It is highly likely that chips produced using 65nm production technology will be released to market sometime in early 2007.

TSMC produces most of the GeForce graphics processors and nForce chipsets for Nvidia. Some components are also made by companies like United Microelectronics Corp. or Chartered Semiconductor, but TSMC remains Nvidia’s No.1 manufacturing partner. Nvidia tried to use IBM’s manufacturing capacities to produce its GeForce 6800-series graphics chips back in 2004, but without much success and decided to stick with TSMC.

In a separate news-story by DigiTimes web-site it was reported that Nvidia’s chief executive Jen Hsun Huang visited Taiwan to make sure that TSMC would “have sufficient capacity for the production of Nvidia’s GeForce 8800 (code-named G80)”. With the GeForce 8800 projected to be commercially launched in November, Mr. Huang reportedly wanted to make sure that production of the graphics chip would “not be affected by competitor ATI’s bookings for TSMC’s 80nm capacity”.