Taipei, April 4, 2007 (CENS)--Intel Corp. recently announced it will contract Taiwan Semiconductor Manufacturing Co. (TSMC) to build its WiMAX chips, suggesting the two companies expand cooperation to include wireless technology in addition to PC technology.

WiMAX chip has been considered as the fourth-generation broadband mobile technology thanks to its speedier transmission and broader coverage as compared with third-generation technology. Intel will begin building this technology in microprocessors for notebook computers this year.

Industry watchers pointed out that the contract marks the two companies expanding their cooperation into wireless chip from PC chip.

Nevertheless, Intel`s plan to open a 300-mm wafer fab in mainland China and begin to produce computer chipsets at the factory using 90-nanometer process technology in 2010 may affect its orders to TSMC. For a long time, Intel has contracted TSMC to make south-bridge chips for its chipsets.

Intel has assured the U.S. government that it will not make microprocessors at the planned factory.

Industry watchers forecast that the Intel factory will eventually take a serious toll on TSMC`s and United Microelectronics Corp.`s (UMC`s) business on grounds that the factory will bring down sales at chipset suppliers Nvidia, Silicon Integrated Systems and VIA Technologies, which have heavily depended on TSMC and UMC for silicon-foundry services.

So far, Intel has not notified VIA to discuss Intel`s license on use of its 1333MHz frontside bus technology for chipsets that support Intel`s Core 2 Quad microprocessors.

Industry watchers pointed out that Intel began staging a low-price war last year with Advanced Micro Devices (AMD) in microprocessor market in attempt to regain lost share from AMD. According to market research organization Mercury Research, AMD bagged up to 25.3% of world microprocessor market last year whereas Intel saw market share recessing to 74.4%, the lowest in 11 years.
(by Ken Liu)