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Technology Stocks : Xilinx (XLNX) -- Ignore unavailable to you. Want to Upgrade?

To: SemiBull who wrote (2914)	1/30/2003 12:30:47 AM
From: SemiBull	Read Replies (1) \| Respond to of 3291

Xilinx plans price cuts for upcoming 300-mm production By Anthony Cataldo, EE Times January 30, 2003 URL: siliconstrategies.com SAN MATEO, Calif. — Xilinx Inc. plans to cut prices of its top-shelf Virtex 2 Pro field-programmable gate arrays as much as 50 percent as it shifts production to 300-mm wafers and works to improve yields of 0.13-micron process technology, company officials said. Under the new pricing plan, Xilinx's XC2VP4 with 6,768 logic cells will sell for less than $30 in 100,000-unit quantities and its XC2VP20, with 20,880 logic cells, will go for less than $100 in orders of 50,000 units or more. The new prices will go into effect by the end of 2004, when customers are expected to start building electronic gear with the FPGAs in high volume. The price reduction is Xilinx's second since last March, when the company introduced the Virtex 2 Pro. The high-end FPGA line includes embedded high-speed serial transceivers, memory and at least one PowerPC processor. "Customer demand to reduce cost has been pretty large over the last couple of years," said Babak Hedayati, senior director of product marketing at Xilinx. The San Jose, Calif. company claims it can make the steep cuts because it is moving faster than most chip makers in shifting from 200- to 300-mm wafers. Transition to the 12-inch wafers more than doubles the number of chips produced per wafer. Today, 38 percent of the Xilinx's wafers are 300 mm, and the company expects that figure will rise to 50 percent by year's end. Xilinx will tap both IBM Microelectronics and United Microelectronics Corp. for 300-mm production, Hedayati said. The move to 300-mm manufacturing should help the company improve wafer yields as it works with its foundries to fine-tune its 0.13-micron process technology. While officials said Xilinx is fielding 0.13-micron-based silicon in production quantities, the company hasn't been able to fulfill all customer orders. Willem Roelandts, president and chief executive officer of Xilinx, said backlogs should be less of a problem in coming months. "We'll have close to zero backlog by the end of this quarter because yields are improving," he said in a recent conference call with financial analysts. Roelandts said the shift to 300-mm wafer lines should contribute to better yields. The transition, however, will involve some risk. "The process is still fragile and the 300-mm adds additional risk on there because they're [using] newer fabs and newer operators. But we think we're seeing good enough results to make the transition," he said. Besides having to streamline production to satisfy more price-conscious customers, Xilinx must contend with its re-energized rival Altera Corp., which has been quick to roll out new products as it tries to catch Xilinx's lead. Altera points to its ten 0.13-micron products — five of them production-grade — being made at foundry Taiwan Semiconductor Manufacturing Co. as proof that it has taken the manufacturing lead. "We simply have out-executed the competition in the 0.13-micron node," said Altera president and CEO John Daane, in a recent conference call with financial analysts. Xilinx, however, claims its Virtex 2 Pro devices contain more logic elements per square millimeter of silicon than Altera's high-end Stratix chips, which gives Xilinx's parts a smaller relative die size. The smaller the die, the more chips that can be produced on a wafer. Whether Xilinx's aggressive transition to 300-mm wafers gives it an additional manufacturing edge should be known in the next year as Altera takes a more cautious approach to the larger wafers. "We're not wholly cutting over from 200-mm to 300-mm as we're still working on yields," Altera's Daane said. "We'll make the transition when we see the cost points justify the transition from 200-mm to 300-mm." It will also take Xilinx some time to see big payoffs from 300-mm production. "There's still inventory of 200-mm wafers that have to be shipped before the cost and yield benefits of 300-mm can be fully realized," Roelandts said.