Taipei, June 19, 2008 (CENS)--Taiwanese insiders of the semiconductor industry recently said that VIA Technologies Inc. would contract Taiwan Semiconductor Manufacturing Co. (TSMC) to make its dual-core, 45nm Nano microprocessors designed for low-priced in second half next year.

They said a collaboration with TSMC would likely help VIA shake off loss and even create its heyday as it did several years ago when it outshone Intel in the competition for leadership of chipset specification setting with its PC133 specification.

In response to the talks, VIA stated on June 17 that it would assess all possible foundry suppliers from pricing, technology and service and would not necessarily place the contracts with Fujitsu, which has been the major foundry supplier of VIA`s 65nm microprocessors including 65nm Nano.

VIA shifted to product emphasis to microprocessor four years ago from chipset. The company eventually turned to Fujitsu for foundry supply after having its chips made at TSMC and International Business Machines (IBM) for a while. Currently, microprocessor contributes 70% of VIA`s revenue.

TSMC has declined to make comment on the reports.

VIA`s executives pointed out that the company`s Nano and C8 processors feature energy conservation and Lilliputian size, targeting mainstream PCs and new applications. The company`s president, W.C. Chen, said big PC players including Dell, Acer, Toshiba, and Sony were interested in the proprietary microprocessors.

Chen noted his company had adhered to energy-saving policy to develop green chips and low-priced PCs would become mainstream PCs as more and more manufacturers had plunged in the manufacturing.

VIA had annual revenue crossing NT$30 billion (US$1 billion at US$1:NT$30) in 2000 and 2001 thanks to its victory over Intel in the competition for leadership of chipset specification setting. In the meantime, VIA had become one of TSMC`s top 10 customers of 0.15-micorn and 0.18-micron processes.

During its heydays, VIA placed TSMC with contracts for 30,000 200-mm wafers of chipsets a month, roughly equal to the monthly output of a 200-mm wafer fabrication factory.

However, the company`s revenue has halved to only NT$14.6 billion (US$486 million) and lost NT$3.82 per share last year after fluctuating around the NT$20 billion (US$666 million) baseline for few years as a result of poor sale of its F4 chipsets. It has thus dropped out of TSMC`s top-10 customer list.

Chen estimated his company would unlikely turn a profit this year.

(by Ken Liu)