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The companies will manufacture 90-nanometer field programmable gate array (FPGA) chips for Xilinx, a Californian chip designer. Xilinx, which does not have chip production facilities, aims to sell the programmable chips to its customers later next year.
The new 90-nanometer technology, which measures less than 1/1,000th of a human hair, promised to cut the size of chips by up to 80%, according to IBM. An FPGA chip is "sort of a halfway step" to an application-specific integrated circuit (ASIC). Unlike ASIC chips, which are hardwired, FPGA chips have a programmable part, which offers greater flexibility.
IBM and UMC are among several semiconductor manufacturers, including Intel, that are in the race to shrink chip circuitry in an effort to increase the performance and features of their computing products. Intel is also targeting 2003 for delivery of its 90-nanometer chips.
In August, the company released details of how its technology had evolved. Using the new 90-nanometer technology, Xilinx aims to reduce prices to less than $25 for a one-million-gate FPGA, representing a saving of between 35% to 70%.
IBM is manufacturing Xilinx's flagship VirtexX-II Pro semiconductor products using a 130mm process on 200mm wafers. UMC has been a primary supplier of high-volume programmable chips to Xilinx for nearly a decade.