Recession pushes chip makers to move on 28nm chips

The need to lower costs while increasing performance is behind chip technology improvements

Xilinx, which makes a range of chips often used in communications gear, plans to release its first 28-nanometer chips by the fourth quarter of this year to lower costs and attract new customers as the world pulls out of recession.

Contract chip manufacturers will begin producing a range of chips with transistors and other components as small as 28nm around the middle of this year for Xilinx and other companies that have announced plans to make such advanced chips, including Altera and STMicroelectronics. A nanometer is a billionth of a meter, about the size of a few atoms combined.

Reducing the size of the parts on a chip lowers power use, raises performance and reduces the cost of chips, all important benefits at a time when people want ever smaller devices that can do more.

What holds some companies back from 28nm chips is the cost and intensive design work for the initial blueprints. Companies can spend months and tens of millions of dollars to tweak their designs for mass chip production.

But the rewards for big companies are worth it. Xilinx estimates its 28nm chips will reduce total power use by 50 percent compared to previous generations, while other enhancements can further drive down power consumption and lower system costs by 33 percent, the company said in a statement on Monday.

Xilinx's main rival in the programmable chip business, Altera, is also readying 28nm chips. Altera says the chips and some of its own innovations are needed for a range of new computing trends that require high bandwidth, such as high-definition video, cloud computing, online data storage and mobile video.

Equipment developers need to increase system bandwidth for these applications while remaining within strict power and cost budgets, Altera has said, and 28nm chips can help meet those requirements.

The company says it will embed 28Gbps (gigabit per second) transceivers on its upcoming 28nm chips, but it did not say when those chips would be available.

Xilinx plans to have its 28nm chips manufactured by Taiwan Semiconductor Manufacturing (TSMC) and Samsung Electronics' contract chip-making subsidiary, Samsung Semiconductor Foundry.

TSMC has said it will start mass producing 28nm chips aimed at computing, wirleless and networking gear for several customers later this year and plans to spend a company record high of US$4.8 billion in 2010 on new production lines.

Samsung is often a global leader in capital spending on chip factories due to its sprawling memory chip operations, as is Intel, the world's largest chip maker.

Intel and Micron have already unveiled new 25nm flash memory chips at their IM Flash Technologies joint venture, the first commercial chip products made using advanced 25nm manufacturing technology. Samsung is working on 30nm technology and plans to use it in most of its memory chip production lines by the end of 2010.

Making memory chips at such small sizes is easier than logic chips such as microprocessors or the communications chips designed by Xilinx and Altera. Logic chips are more complex. Intel, for example, has shown off microprocessors made using 32nm technology, while its IM Flash joint venture is using the smaller 25nm technology.

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