Resurgent Chartered to Produce CPUs for Xbox 360

Singapore’s Chartered Semiconductor Manufacturing Friday reported that its revenue nearly doubled during the first quarter and announced a deal to produce microprocessors for Microsoft’s Xbox 360 game console next year.

The contract chip maker’s first-quarter revenue was US$355.2 million, up 96 percent from the same period last year. At the same time, the company swung back into the black, reporting net income of $25.3 million during the first quarter, compared to a loss of $84.5 million last year.

Chartered’s results were boosted by strong demand for its more advanced manufacturing technology.

"For the first time in our history, revenues from 0.13 micron and more advanced technologies contributed approximately 50 percent of our total base business revenues," said George Thomas, Chartered’s senior vice president and chief financial officer, in a statement.

The chip maker’s 90-nanometer production process, its most advanced technology, accounted for 25 percent of revenue during the quarter, it said.

These numbers, measured in millionths of a meter, are used to describe chip manufacturing processes and refer to the size of the smallest feature that can be created on a silicon chip. Smaller is better, as this generally brings a reduction in power consumption, a boost in performance and a reduction in unit manufacturing costs.

In terms of capacity, Chartered’s utilization rate was 82 percent during the first quarter, up from 59 percent one year ago, due to higher demand for chips used in consumer electronics and communications applications, as well as a more modest increase in computer chips.

Looking ahead, Chartered expects to see its revenue increase slightly during the second quarter, to around US$363 million. The company expects to post net income of about US$16 million during the period.

Further out, Chartered announced an agreement to produce microprocessors for Microsoft’s Xbox 360. Those chips, which will enter production during the first quarter of next year, will be manufactured using a 65-nanometer production process, Chartered said.

Chartered also has an agreement to produce microprocessors for Advanced Micro Devices (AMD). The first chips to be produced under that agreement are on track to come during the second half of this year and will be produced using a 90-nanometer process, according to a recent statement by AMD.

-Sumner Lemon, IDG News Service

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