By Mark LaPedus EETimes Supply Network (05/08/2007 12:32 PM EST)

DALLAS — Texas Instruments Inc. here Monday (May 7) disclosed its new foundry strategy, indicating that TSMC, UMC and a yet-to-be-determined vendor will split the U.S. company's 45-nm business.

As part of the disclosure, Taiwan's United Microelectronics Corp. (UMC) appears to have scored a major victory, as that company will make Sparc processors on a foundry basis at the 45-nm node for Sun Microsystems Inc., according to an executive from TI (Dallas). Previously, TI had been exclusively making Sparc chips on a foundry basis for Sun.

UMC's rival, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), also won some significant 45-nm, DSP foundry business at TI. It's unclear if TI's other foundry partner--Chartered Semiconductor Manufacturing Pte. Ltd.--won any 45-nm business.

Overall, TI makes chips within its own logic fabs, but the company also outsources half of its production to third-party foundry providers in an effort to reduce its production costs, said Kevin Ritchie, senior vice president of TI's Technology and Manufacturing Group, in an interview here.

Basically, there are three facets to TI's complex foundry strategy: wireless, DSP and Sparc processors. First, at the current 65-nm node, TI has three foundry partners for use in making its wireless chips: Chartered, TSMC and UMC.

Second, within its own logic fabs, TI develops processes and makes its own 65-nm high-performance digital signal processors (DSPs). And finally, TI also makes Sparc microprocessors on a foundry basis for Sun Microsystems.

Going forward, TI will continue to make chips within its own logic fabs at the 45-nm node. It will continue to utilize foundries.

But in a switch in its strategy at 45-nm, UMC will also make Sparc processors on a foundry basis for Sun, according to Ritchie. ''For the first iteration, it will be UMC,'' he said. Sun has not disclosed its manufacturing plans, however.

For the high-performance DSP business at 45-nm, TI will develop this process with TSMC, he said. TI, along with TSMC, are expected to manufacturer these products.

For wireless chips at 45-nm, TI will continue to use UMC and TSMC, he said. TI plans to name a third foundry partner for wireless devices at 45-nm, but that partner has yet to be determined. Much of that decision depends on a partner with aggressive or ''disruptive pricing,'' he said.

In January, TI said that it will continue to make chips within its own logic and analog fabs. But the company has decided to drop the costly business of digital logic process development and rely on foundry partners for its processes.

TI said it will complete the development of its own, 45-nm logic process. Then, it has decided to stop internal development at the 45-nm node and use foundry supplied processes at 32-, 22-nm and thereafter.