TSMC gets contract to manufacture Xbox 2 GPU

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TSMC will get the job of manufacturing the ATI-designed graphics processor
for Xbox 2, aka Xbox Next, aka Xenon.


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http://news.teamxbox.com/xbox/5630/TSMC-To-Manufacture-Xbox-2-Chips
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TSMC To Manufacture Xbox 2 Chips
By: César A. Berardini - "Cesar"
Apr. 6th, 2004 06:00 am


Microsoft Corporation and Taiwan Semiconductor Manufacturing Company (TSMC)
have reached an agreement for TSMC to provide semiconductor manufacturing
services for "Microsoft's future Xbox products".

The breakthrough agreement expands an ongoing relationship between the two
companies by providing Microsoft with direct, collaborative access to TSMC's
advanced semiconductor process technologies.

"TSMC has consistently demonstrated industry leadership in the development
and deployment of highly advanced semiconductor process technologies for
high-volume manufacturing," said Todd Holmdahl, Xbox General Manager of
Microsoft Corporation. "It was this solid record of achievement that led us
to work directly with TSMC on semiconductors targeted to our future game
consoles products."

Founded in 1987, TSMC is the largest semiconductor foundry in the world,
specializing in manufacturing semiconductors for its customers in a wide
variety of end markets. Its foundry services also include a broad range of
silicon-proven intellectual property cores and tight integration with
leading electronic design automation (EDA) design tools that allow chip
designers to achieve faster time-to-volume.

"Microsoft's future Xbox products and services will require leading-edge
semiconductor technologies," said Dr. Rick Tsai, president of TSMC. "This
agreement underscores the importance of a partnership between the two
companies to identify the best technology platforms for Microsoft's future
products. We look forward to a long and productive collaboration with
Microsoft."


What All This Means

Microsoft Corp. has licensed so far microchip technology from IBM Corp. and
ATI Technologies Inc with SiS selected as the chipset contractor. Today's
announcement regarding the partnership with TSMC does no other thing but
confirm that Microsoft is becoming a "fabless" company, a term used to
describe those companies who design their chips but have another company to
build them.

Both Microsoft's deals with IBM and ATI are similar to those both companies
already have with Sony and Nintendo, respectively. IBM & ATI provide
customized technology for the Xbox successor and, in exchange, they will
receive royalties. That's different from today's model where nVIDIA's Xbox
revenues comes from selling chips to Microsoft.
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http://www.theinquirer.net/?article=15200
Microsoft, TSMC to collaborate on Xbox 2

Put a SOC in it


By INQUIRER staff: Tuesday 06 April 2004, 12:57

CHIP FOUNDRY TSMC and Microsoft issued a statement today saying they will
collaborate on future Xbox technology.
Although the two companies were slim on details of the deal, the move will
give Microsoft access to TSMC's Nexsys technology for systems on a chip
(SOC).

Microsoft, said TSMC, "will be given direct collaborative access" to its
process technology.

No financial details were given.

Nexsys, however, is TSMC's 90 nanometre proces technology, which offers a
triple gate oxide feature, and which it claims will allow it to establish
the SOC technology standard. µ

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http://www.adr.com/adr?page=adrnews&formtype=4&level=C&prod=RT&mdate=2004040
6&mseq=4981669

UPDATE 1-Taiwan's TSMC to make chips for Microsoft Xbox (REUTERS)
Updated: Tuesday, April 06, 2004 06:23AM ET

UPDATE 1-Taiwan's TSMC to make chips for Microsoft Xbox

(Adds details)

TAIPEI, April 6 (Reuters) - TSMC <2330.TW>, the world's largest contract
maker of semiconductors, will make chips for future Microsoft Xbox game
consoles, the two companies said on Tuesday.

The agreement expands an existing relationship and allows Taiwan
Semiconductor Manufacturing Co (TSMC) to directly provide Microsoft with the
most advanced semiconductor process technologies, they said in a joint
statement.

No other details were immediately available.

TSMC now has a contract to make graphics chips for the second generation of
Xbox game consoles through Canada's ATI Technologies Inc , the world's
second-largest graphics chip maker.

Microsoft signed that deal with ATI, which outsourced manufacturing to TSMC.
The next generation of Xbox is set for release late in 2005.

The latest agreement was signed directly by Microsoft and the Taiwan
company, said TSMC spokesman Tzeng Jinn-haw. He declined to give a dollar
value for the contract.

The announcement came after the close of Taiwan trade on Tuesday. The
Taipei-traded shares of TSMC, which is one-fifth-owned by the Netherlands'
Philips Electronics N.V. ended flat at T$62.0 each.

Last month, Microsoft lowered the price of the Xbox to $149.99 from $179.99,
a move seen as a change in strategy. Microsoft previously cut the Xbox price
only after similar cuts from industry leader Sony Corp <6758.T> on the
PlayStation 2.

ATI focuses on designing chips used to compute complex three-dimensional
graphics for computer games, but outsources the actual microchip production
to companies like TSMC.
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http://www.tsmc.com.tw/tsmcdotcom/PRListingNewsAction.do?action=detail&LANG=
E&newsid=1500&newsdate=2004/04/06

TSMC to Supply Products and Services for Future Microsoft Game Consoles

Manufacturing Pact Gives Microsoft Access to Advanced Nexsys(SM) Technology
for SoC


Issued by: Microsoft Corporation and Taiwan Semiconductor Manufacturing
Company
Issued on: 2004/04/06



Hsin-Chu, Taiwan - April 6, 2004 - Microsoft Corporation (MSFT) and Taiwan
Semiconductor Manufacturing Company (NYSE:TSM) have reached an agreement for
TSMC to provide semiconductor manufacturing services for Microsoft's future
Xbox products.

The breakthrough agreement expands an ongoing relationship between the two
companies by providing Microsoft with direct, collaborative access to TSMC's
advanced semiconductor process technologies.

"TSMC has consistently demonstrated industry leadership in the development
and deployment of highly advanced semiconductor process technologies for
high-volume manufacturing," said Todd Holmdahl, Xbox General Manager of
Microsoft Corporation. "It was this solid record of achievement that led us
to work directly with TSMC on semiconductors targeted to our future game
consoles products."

Founded in 1987, TSMC is the largest semiconductor foundry in the world,
specializing in manufacturing semiconductors for its customers in a wide
variety of end markets. Its foundry services also include a broad range of
silicon-proven intellectual property cores and tight integration with
leading electronic design automation (EDA) design tools that allow chip
designers to achieve faster time-to-volume.

"Microsoft's future Xbox products and services will require leading-edge
semiconductor technologies," said Dr. Rick Tsai, president of TSMC. "This
agreement underscores the importance of a partnership between the two
companies to identify the best technology platforms for Microsoft's future
products. We look forward to a long and productive collaboration with
Microsoft."

___________________________________________________________________________




____________________________________________________________________________

http://story.news.yahoo.com/news?tmpl=story&cid=569&ncid=738&e=7&u=/nm/20040
406/tc_nm/tech_taiwan_tsmc_dc
Taiwan's TSMC to Make Chips for Microsoft Xbox
2 hours, 42 minutes ago Add Technology - Reuters to My Yahoo!



TAIPEI (Reuters) - TSMC (2330.TW), the world's largest contract maker of
semiconductors, will make chips for future Microsoft (NasdaqNM:MSFT - news)
Xbox (news - web sites) game consoles, the two companies said on Tuesday.



The agreement expands an existing relationship and allows Taiwan
Semiconductor Manufacturing Co (TSMC) (NYSE:TSM - news) to directly provide
Microsoft with the most advanced semiconductor process technologies, they
said in a joint statement.


No other details were immediately available.


TSMC now has a contract to make graphics chips for the second generation of
Xbox game consoles through Canada's ATI Technologies Inc (Toronto:ATY.TO -
news), the world's second-largest graphics chip maker.


Microsoft signed that deal with ATI, which outsourced manufacturing to TSMC.
The next generation of Xbox is set for release late in 2005.


The latest agreement was signed directly by Microsoft and the Taiwan
company, said TSMC spokesman Tzeng Jinn-haw. He declined to give a dollar
value for the contract.


The announcement came after the close of Taiwan trade on Tuesday. The
Taipei-traded shares of TSMC, which is one-fifth-owned by the Netherlands'
Philips Electronics N.V. (PHG.AS) ended flat at T$62.0 each.


Last month, Microsoft lowered the price of the Xbox to $149.99 from $179.99,
a move seen as a change in strategy. Microsoft previously cut the Xbox price
only after similar cuts from industry leader Sony Corp (news - web sites)
(6758.T) on the PlayStation 2 (news - web sites).


ATI focuses on designing chips used to compute complex three-dimensional
graphics for computer games, but outsources the actual microchip production
to companies like TSMC. (US$=T$33.0)
 
TSMC will get the job of manufacturing the ATI-designed graphics processor
for Xbox 2, aka Xbox Next, aka Xenon.
Click to expand...

Sounds good for ATI but you have to remember that it was because of
Nvidia's devotion of resources to Xbox 1 that they dropped the ball on
their consumer PC graphics cards, something that Nvidia are only just
recovering from. That is probably why Nvidia weren't so keen on playing
the Xbox 2 gig. High volume but very low margin, Xbox 2 is only worth
bragging rights for whoever makes the GPU, and NV have long since realised
that it's not worth it, especially dealing with MS who attempted to bleed
them dry over the pricing.

K
 
K said:
Sounds good for ATI but you have to remember that it was because of
Nvidia's devotion of resources to Xbox 1 that they dropped the ball on
their consumer PC graphics cards, something that Nvidia are only just
recovering from. That is probably why Nvidia weren't so keen on playing
the Xbox 2 gig. High volume but very low margin, Xbox 2 is only worth
bragging rights for whoever makes the GPU, and NV have long since realised
that it's not worth it, especially dealing with MS who attempted to bleed
them dry over the pricing.
Click to expand...


Simply untrue. The problems with the FX series of GPUs had absolutely
nothing to do with the Xbox project. The major work on those chips didn't
even begin until after the XGPU was in production. There was an entire
generation of NVIDIA GPU's, GeForce4, that came directly on the heels of the
XGPU and are largely improved PC versions of that part with additional
features. Likewise the other major IC in the Xbox supplied by NVIDIA is
almost entirely encompassed by the equivalent part in their Nforce chipset
for PC motherboards.

There is nothing in the Xbox that wasn't part of NVIDIA's existing path.

NVIDIA's complaint was solely about sales. The failure of the Xbox to
sell in much greater numbers than it did and Microsoft's continuing attempts
to negotiate lower prices for the chips, reducing the potential profit still
more. If the early volumes had been there would have been little problem and
continuing investment for a cost reducing die shrink would have been
justified. This would have advantages beyond the cost of the chips
themselves since the reduce power draw and heat would allow for a revisions
to the rest of the Xbox to reduce cost and size thus making the product
attractive to a wider audience.

The FX series of GPUs represent a massive increase in complexity and
transistor counts over the GeForce4. NVIDIA tried to mitigate the resulting
issues by moving to a smaller manufacturing process level but found that
combining that transition with the difficulties already presented by the
DirectX 9 class technology only made matters worse. ATI avoided this by
sticking with their current dependable process and living with a monster
die size. Another factor was that NVIDIA chose to include some higher-end
features that had little bearing on the consumer market. This gave them and
edge in their version of the chip targeting the engineering and workstation
markets but also increased the transistor count. ATI chose to favor the
consumer market and had a design that was manageable, albeit on the bulky
side. They saved the inevitable transition to a smaller process level until
after they'd gotten dependable yields on this class of chip from the current
manufacturing process.

ATI is not oblivious to what happened between Microsoft and NVIDIA. You
can be sure those issue loomed large in the negotiations for the Xbox-2
parts.
 
Eric Pobirs said:
Simply untrue. The problems with the FX series of GPUs had absolutely
nothing to do with the Xbox project. The major work on those chips didn't
even begin until after the XGPU was in production. There was an entire
generation of NVIDIA GPU's, GeForce4, that came directly on the heels of the
XGPU and are largely improved PC versions of that part with additional
features. Likewise the other major IC in the Xbox supplied by NVIDIA is
almost entirely encompassed by the equivalent part in their Nforce chipset
for PC motherboards.

There is nothing in the Xbox that wasn't part of NVIDIA's existing path.

NVIDIA's complaint was solely about sales. The failure of the Xbox to
sell in much greater numbers than it did and Microsoft's continuing attempts
to negotiate lower prices for the chips, reducing the potential profit still
more. If the early volumes had been there would have been little problem and
continuing investment for a cost reducing die shrink would have been
justified. This would have advantages beyond the cost of the chips
themselves since the reduce power draw and heat would allow for a revisions
to the rest of the Xbox to reduce cost and size thus making the product
attractive to a wider audience.

The FX series of GPUs represent a massive increase in complexity and
transistor counts over the GeForce4. NVIDIA tried to mitigate the resulting
issues by moving to a smaller manufacturing process level but found that
combining that transition with the difficulties already presented by the
DirectX 9 class technology only made matters worse. ATI avoided this by
sticking with their current dependable process and living with a monster
die size. Another factor was that NVIDIA chose to include some higher-end
features that had little bearing on the consumer market. This gave them and
edge in their version of the chip targeting the engineering and workstation
markets but also increased the transistor count. ATI chose to favor the
consumer market and had a design that was manageable, albeit on the bulky
side. They saved the inevitable transition to a smaller process level until
after they'd gotten dependable yields on this class of chip from the current
manufacturing process.

ATI is not oblivious to what happened between Microsoft and NVIDIA. You
can be sure those issue loomed large in the negotiations for the Xbox-2
parts.
Click to expand...



Well said, Eric.

I pretty much completely agree with what you've said above.
 
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