NVIDIA Corp. Expands Fab Partner List – Reports

by Anton Shilov
12/12/2004 | 01:24 PM

NVIDIA Corp., a leading supplier of graphics processors and core-logic sets, is expanding its list of manufacturing partners among semiconductor makers rapidly, say the company’s detailed reports as well as reports from Nomura Securities, a Taipei, Taiwan-based equity research firm.

Santa Clara, California-based NVIDIA Corp. historically made all of its graphics and multimedia processors at TSMC in Taiwan; however, in early 2003 the company inked a manufacturing deal with IBM to make some of its chips and then acquired MediaQ, a mobile logic company, which stipulated NVIDIA to make its products for handhelds at UMC, another Taiwan-based contract semiconductor maker. Nevertheless, the list of NVIDIA’s manufacturing partners is being rejigged even now, as the company and industry analysts report about certain potentially new projects of the firm.

“NVIDIA is moving some GeForce FX and GeForce 6 production to TSMC and Xbox to UMC for more cost-efficient manufacturing. Here NVIDIA is making the most of its scale, since placing orders with two foundries should ensure solid pricing and ease any concerns on the capacity foundries are willing to allocate,” says report from Nomura Securities, an Asia-based equity research firm.

Transition of Xbox-related products to United Microelectronics Corp. (UMC), who typically charges less compared to Taiwan Semiconductor Manufacturing Company (TSMC), may mean increased gross-margins for NVIDIA.

NVIDIA did not directly confirm transition of Xbox core-logic production to UMC, but said the company had been manufacturing products at UMC, mostly handheld-related products, for quite some time and that the company always used more than one foundry for the different products.

The company, apparently, also produces some of its present or future products at Chartered Semiconductor, a company that collaborates with IBM in manufacturing processes.

“We do not manufacture the semiconductor wafers used for our products and do not own or operate a wafer fabrication facility. Our products require wafers manufactured with state-of-the-art fabrication equipment and techniques. We utilize TSMC, IBM, UMC, and Chartered to produce our semiconductor wafers and utilize independent subcontractors to perform assembly, testing and packaging,” NVIDIA said in its recent Form 10Q for Q3, fiscal year 2005.

It is currently unclear, which products may be produced at Chartered Semiconductor. Given that IBM only makes GeForce FX 5700-, 6800-series (NV36, NV40 and NV41 chips) and, presumably, will make nForce5 aka Crush 19 core-logic, the choice of products among the current that may be made at Chartered without significant redesign is not wide. But the company can also manufacture certain yet-to-come processors at Chartered, which is based in Singapore.

NVIDIA's arch-rival ATI Technologies uses TSMC and UMC fabs to make its chips and certain other to test and package them.