United Microelectronics Corp. (UMC) sees the possibility of new microprocessor deals as major chip makers farm out more orders to contract chip makers, the head of the company said Wednesday. It’s an outsourcing trend the chip industry has seen before. Advanced Micro Devices, for example, announced a plan to build a joint chip factory with UMC in Singapore in early 2002, dubbed AU. But the plan was scuttled after AMD joined a technology alliance led by IBM.
A new deal by AMD to join with a contract chip maker would likely prolong its battle with microprocessor market leader Intel, which would benefit users with continued low prices for the latest chips. The two companies have fought a fierce price war for over a year, driving down the cost of microprocessors, the most expensive chip in a PC.
A number of major chip makers will likely farm out chip production in the future instead of building new factories or investing in new chip production research, according to Jackson Hu, chairman of UMC, at the company’s first-quarter investor’s conference in Taipei.
Source: InfoWorld