GlobalFoundries inks wafer baker deal with STMicro

GlobalFoundries, the wafer baker that was spun out of Advanced Micro Devices in March and which broke ground on a new $4.2bn chip fab in upstate New York last week, has its second customer: STMicroelectronics, of Geneva, Switzerland.

STMicro makes all kind of chips, including those used in the automotive, industrial, computer, and communications sectors. And in addition to running its own foundries, it has relationships with a number of other fabs to make some of the chips it sells. In the first half of 2009, STMicro had $3.65bn in sales, down 25 per cent, and a net loss of $859m, considerably larger than the $131m loss it posted in the first half of 2008.

This means the company is as under pressure to cut costs as GlobalFoundries is to find companies to keep Fab 1 in Dresden warm. The Dresden fab counts AMD as its only customer until STMicro comes on board. It will take until 2012 to build and ramp up volume production in the Fab 2 plant in New York, and it is not clear what, if any, part of the STMicro deal is for chips made there.

The term of the deal was not specified, except that it is a multi-year pact, and financial terms were not disclosed.

GlobalFoundries said in a statement that STMicro will be using the 40 nanometer low-power bulk process available in Fab 1, which is characterized as being "ideal for the next generation of wireless applications, handheld devices, and consumer electronics" that need performance as well as long battery life. GlobalFoundries says that tape out for the first STMicro chips will start in 2010, and it neither company said what chips in particular would be made in Dresden or what the volumes would be. Fab 1 uses 300mm silicon wafer technologies and currently has 45 nanometer processes in volume, which are used to make AMD's Opteron line of server chips.

According to a report in EE Times, STMicro has its own fabs in France, Italy, and Singapore as well as partnerships with United Microelectronics (UMC) and Taiwan Semiconductor Manufacturing (TSMC), both of Taiwan. And significantly, the report claims that TSMC is having issues with its 40 nanometer processes, leaving the door open for GlobalFoundries to walk in for at least some chip baking. ®