Infineon ends R&D efforts, joint venture with UMC

United Microelectronics Corp. (UMC), the world’s second-largest contract chip maker, and Infineon Technologies have ended joint R&D efforts to develop advanced process technologies for semiconductor manufacturing, a UMC spokesman confirmed Thursday. In addition, Infineon also plans to pull out of a manufacturing joint venture with UMC in Singapore, the two companies said.

“We’re going to continue to develop the technology by ourselves,” said Alex Hinnawi, a spokesman for UMC, referring to the 65-nanometer process technology that UMC and Infineon had been developing jointly. “The joint development program we had with [Infineon] is winding down.”

The most advanced process currently in commercial production is 90 nanometers, which refers to the size of the smallest feature that can be created on a chip. By shifting to more advanced process technologies, chip makers are able to shrink the size of chips and can produce more chips on a single silicon wafer.

The news that Infineon and UMC, in Hsinchu, Taiwan, would end their joint R&D efforts came as Infineon announced on Wednesday plans to pull out of a manufacturing joint venture, UMCi Pte. Ltd., it set up in Singapore together with UMC and an arm of the Singaporean government. The German chip maker instead plans to begin R&D work on 65-nanometer process technology with UMC rivals IBM and Chartered Semiconductor Manufacturing, it said.

Infineon’s shares in UMCi will be purchased by UMC, the companies said in a joint statement. The third partner in the joint venture, Singapore’s Economic Development Board, will retain its equity stake in the joint venture, it said.

Infineon will continue to be a customer of UMC, the statement said.

Infineon’s departure from the UMCi joint venture will do not disrupt manufacturing plans at the Singapore plant, Hinnawi said. Equipment is being moved into the facility and UMCi is on track to produce 10,000 300-millimeter wafers per month by the end of 2004, he said.

Infineon, based in Munich, is the second partner to pull out of R&D efforts with UMC since the beginning of this year. In January, Advanced Micro Devices (AMD) withdrew from a three-way R&D agreement announced in July 2002 with Infineon and UMC to develop 65-nanometer process technology, throwing plans between AMD and UMC for a joint-venture chip manufacturing facility.in Singapore into disarray.

Like Infineon, AMD opted to instead work with IBM to develop 65-nanometer process technology.

Under the terms of the agreement between Infineon, Chartered, and IBM, the three partners will work together to develop a common process platform that scales from 90 nanometers through 65 nanometers, the companies said in a joint statement. They will also explore the possibility of extending that work to a 45-nanometer process technology, it said.

Those R&D efforts will be conducted by 200 engineers at IBM’s 300mm chip fabrication plant in East Fishkill, N.Y., the statement said. Financial terms of the agreement were not disclosed.