IBM to manufacture Nvidia's graphics chips

IBM landed a major foundry deal expected to be worth over US$100 million Wednesday, agreeing to manufacture the next generation of Nvidia's GeForce graphics processors at its fab in East Fishkill, New York.

Work on the new chips will start in the middle of 2003. IBM will use its 0.13 micron process technology to produce 300 millimeter wafers, which is the most sophisticated level of production currently used in mass quantities by other chip makers such as Intel, and Taiwanese contractors such as Taiwan Semiconductor Manufacturing (TSMC), which currently manufactures graphics chips for Nvidia.

Responding to the announcement, TSMC issued a statement Wednesday saying that the Taiwanese chip maker had been reassured by Nvidia that it would remain the primary manufacturing source for the graphics chip vendor.

An Nvidia spokesman confirmed that Wednesday, saying that Nvidia's five-year relationship with TSMC would be unaffected by the decision to add IBM as a foundry partner, said Derek Perez of Nvidia. TSMC will continue to make the company's older graphics chips and chipsets going forward, and will manufacture new chips as well, he said.

TSMC has had trouble implementing its current 0.13 micron process technology, causing delays in product shipments for customers such as Nvidia and Transmeta. The delay affected Nvidia's ability to keep up with rival ATI Technologies in terms of releasing new products, but Perez denied suggestions that the delays contributed to Nvidia's decision to add IBM as a partner.

More likely, the decision to bring in IBM reflects a desire to use IBM as a development fab, and TSMC as the high-volume manufacturer, said Dean McCarron, principal analyst at Mercury Research in Arizona. Intel has a similar strategy, where it manufactures developmental chips in low volumes at certain fabs, then switches to high-volume fabs once demand for that chip picks up, he said.

Nvidia's wide range of products means the company needs the flexibility to work with different partners, which can bring cost savings, McCarron said.

GeForce processors bring enhanced graphics to PCs, and are usually found in PCs used in gaming and other graphics-intensive applications. Nvidia shipped 32 percent of total graphics processors shipments in the fourth quarter of 2002, according to data from Jon Peddie Research.

IBM refitted its East Fishkill facility last year, laying off a number of workers in other technologies to make way for the contract chip-making services. Wafer fabrication plants are notoriously expensive to build from scratch, and many chip designers choose to outsource the manufacturing to foundries such as TSMC and United Microelectronics in Taiwan.

Since bringing the fab online last year, IBM has signed agreements with Qualcomm and Xilinx to manufacture chips for those companies on the new chipmaking technology, an IBM spokesman said.

In January, IBM announced it would work with Intel rival Advanced Micro Devices Inc. on developing 65 nanometer process technologies. At the time, the two companies said there were no foundry services involved in the deal. AMD and Nvidia work closely together on a number of different technologies, such as Nvidia's chipsets for AMD processors like the Athlon XP.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Tom Krazit and Sumner Lemon

IDG News Service
Show Comments





Back To Business Guide

Click for more ›

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?