Taiwanese foundries gain from IBM's struggles

We've already heard reports that IBM's bid for more foundry business has struggled with low yield rates for customers. Now, DigiTimes reports these problems are leading to more business for Taiwanese foundries TSMC and UMC from customers like NVIDIA and Xilinx.
Nvidia has increased outsourcing to TSMC for its high-end graphics chips produced with a 0.11-micron process, which TSMC has shipped in small volumes, according to a source with Nvidia.

Given that production on a 0.13-micron process can handled with 0.11-micron technology more cost-effectively, Nvidia has delayed its original production plan at IBM, the Nvidia source said.

IBM's stumble is a little suprising given its stellar reputation in chip manufacturing technology and execution. One wonders whether IBM will remain committed to expanding its foundry business long enough to become a serious threat to the likes of UMC and TSMC.
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