NVIDIA and TSMC drama

— 10:25 AM on December 2, 2001

The Inquirer is reporting that NVIDIA has struck a deal with UMC to take over the production of the XBox chipset. The deal will purportedly cause UMC to stamp out over 5,000 eight inch wafers a month.

TSMC—NVIDIA traditional fab partner—was passed over for the XBox deal. The reasons aren't entirely clear, but many suspect that the situation revolves around NVIDIA being unhappy with TSMC current production abilities. It seems that there is not enough capacity at 0.15 microns, and .13-micron facilities are in short supply and overpriced.

One has to wonder if this deal will cause the relationship between NVIDIA and TSMC to further waver. After all, the loss of the XBox deal to TSMC's biggest rival is certain to bruise a few egos. Then again, it's not public knowledge how much of TSMC's capacity NVIDIA consumes. The graphics giant may be at the point where one fab provider is simply not enough to meet their needs.

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