Chartered looks forward to partnership with AMD

On Nov. 9, Advanced Micro Devices Inc. (AMD) announced a manufacturing partnership with Chartered Semiconductor Manufacturing Ltd., a contract chip maker based in Singapore. Under that agreement, Chartered will begin producing 64-bit microprocessors for AMD in 2006.

The deal was big news in semiconductor and financial circles, but what does it mean for the average computer user?

"What it really means for the end (user) market perhaps is an opportunity for AMD to ramp the availability of their AMD 64-bit processors faster," said Kevin Meyer, Chartered's vice president of marketing and services, in a recent telephone interview. "There may be an ability for them to reach more end customers as a result of our relationship."

This deal also leaves open the door to further cooperation between the two companies down the road, according to Meyer.

Contract chip makers -- called foundries by industry insiders -- are an indispensable part of the IT manufacturing chain, producing semiconductors under contract for companies that cannot afford the expense of building a fabs on their own.

Even Intel Corp., the world's largest semiconductor maker, contracts out some production of chips to Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), although the company continues to do all of its PC and server processor manufacturing in-house. Similarly, AMD contracts out some production work but manufactures its own microprocessors, churning them out on 200-millimeter wafers at a fab, called Fab 30, in Dresden, Germany.

There are several reasons why Intel and AMD have kept the production of microprocessors in-house while so many other chip companies turned to foundries for their products. One of the reasons is that microprocessors are among the most difficult chips to manufacture and demand highly specialized manufacturing processes that are part science and part art.

To bring Chartered up to speed, AMD has licensed its Automated Precision Manufacturing software to the chip maker in order to help manage its production lines. The two companies will also spend one year testing the production line at Chartered's newest and most advanced fab, called Fab 7, which will produce chips on 300-millimeter wafers, before a single chip is produced for sale.

"It also turns out that the chips we provide to AMD have to be qualified by the end customer (the computer makers) before we really ramp production," Meyer said.

If everything goes to plan, Chartered will begin producing processors for AMD using a 90-nanometer manufacturing process in 2006, just as AMD begins shifting its own processor production lines to a 65-nanometer process. (The reference to size used when describing a chip-making process indicates the size of the smallest feature that can be created on a piece of silicon using a given process. Thus, the smaller the size is, the more advanced the process technology.)

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