I suppose the 10,000 processors means 10,000 wafers. How many chips would that make? Maybe it's 10 million chips like some people have posted.
Richard
2/25/98 National Semi To Farm Out Some Microprocessor Production
To Tai
TAIPEI -(Dow Jones)- Taiwan Semiconductor Manufacturing Co., the
world's largest contract chip maker, is turning its production
expertise to microprocessors, or central processing units, the
so-called "brains" of personal computers.
A company executive told Dow Jones Wednesday that Taiwan
Semiconductor is involved in a pilot production program with one
of its long-standing customers, Santa Clara, Calif.-based
National Semicondcutor Corp. Although he didn't provide details
about orders or delivery dates, the Financial Times of London
reported that the agreement is valued at $148 million and calls
for the manufacture of 10,000 CPUs per year.
Analysts, calling the news unprecedented, said the agreement
signals a structural shift in the semiconductor industry. The
deal is believed to mark the first time a leading microprocessor
manufacturer has farmed out production of the commercially
sensitive and technologically sophisticated product, the
Financial Times reported.
The production deal comes at a time when a number of U.S.
semiconductor companies are examining closer ties with their
cash-strapped Asian competitors. Last Friday, South Korea's
Samsung Electronics Co., the world's largest maker of memory
chips, said Intel Corp., also of Santa Clara, was in talks to
increase its investment in Samsung's semiconductor operations. A
day earlier, Adaptec Inc. said it agreed to acquire a U.S.
electronics unit of Korean conglomerate Hyundai for $775
million.
Analysts figure the average production costs of Taiwan's chip
makers, with lower pay scales, a less stringent tax structure
and flexible accounting methods, are 10% to 15% below their U.S.
counterparts. Considered Taiwan's best-run chipmaker, Taiwan
Semiconductor is even more cost-effective, the Financial Times
said.
National Semiconductor, based in Santa Clara, Calif., in
November acquired microprocessor designer Cyrix Corp. for $528
million. But it has had difficulties digesting Cyrix. The
company said orders for Cyrix's microprocessors were off during
the fourth quarter. National Semiconductor has been touting the
idea of super-cheap personal computers using "systems-on-a-chip"
technology that would put most of the functions of a computer on
a single chip.
Speaking at an investors conference in San Francisco
Wednesday, National Semiconductor Chief Executive Officer Brian
Halla said the desktop computer market could begin to see $300
machines by the end of this year. BancAmerica Robertson Stephens
analyst Arun Veerappa thinks the real opportunity for National
Semiconductor will be the broader market for sub-$1,000
computers. Computers selling at $300 could be a more important
factor come 1999 and 2000, Veerappan said.
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