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IBM plans next gen of Nvidia graphic chip

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CIOL Bureau
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NEW YORK: The Santa Clara, California chip designer in the past has turned only to the world's largest contract manufacturer, Taiwan Semiconductor, to produce the Nvidia chips used in Microsoft Corp.'s Xbox game console, personal computers, laptops and workstations.



As recently as November, Nvidia executives told Reuters it had no plans to switch its manufacturing from TSMC but said that it might work with other foundries, or chip makers, at some point.



Armonk, New York-based IBM, the world's largest computer company, will make the chip in its state-of-the-art, $2.5 billion East Fishkill, New York chip plant.



Terms of the deal weren't disclosed and Nvidia declined to comment on which chip will be produced at IBM's plant. The plant uses the latest chip-making technologies such as the larger dinner-plate sized 300 millimeter wafers that are more efficient because they can fit more chips on them than the standard salad-plate sized 200 millimeter wafers.



IBM is trying to fill the plant with orders from outside companies as it brings the facility into production this year. It has signed deals with other companies such as contract manufacturer Chartered Semiconductor Manufacturing Inc. and chip maker Xilinx Corp.



It plans to start making the Nvidia chip this summer. Financial analysts have speculated over the last year that Nvidia might seek to shift business from Taiwan Semiconductor to IBM.



Up until late last year, Nvidia had settled into a regular pattern of announcing and then quickly releasing a new generation of chips every six months, which had allowed it to keep the high-performance crown away from rival ATI Technologies Inc.



But that pattern was broken in 2002, when Nvidia unveiled the GeForce FX line in November, as much as three months later than some had expected. The highest-end chip in that line, the GeForce FX 5800 Ultra, began appearing in limited quantities at retail just this month.



In 2003, the stock has risen 20 percent, compared to a 16 percent rise for ATI, as it has unveiled a number of new chips in the GeForce FX line for mainstream and low-cost PCs.



© Reuters

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