NXP to Exit Chip Alliance, Forge Closer Ties With TSMC

NXP Semiconductors, one of Europe’s largest chip makers, has decided to drop out of a multiyear research alliance and plans to work more closely with Taiwan Semiconductor Manufacturing (TSMC), the Dutch company said Tuesday.

NXP, the former semiconductor division of electronics giant Koninklijke Philips Electronics, cited a desire to forge a new path for its future development of chip production technologies as its reason for opting out of the Crolles2 Alliance, which included other major chip makers such as TSMC, STMicroelectronics and Freescale Semiconductor.

Philips and STMicro started the venture with TSMC in 2000 as a way to share the cost of developing advanced chip-production technologies, and renewed the alliance in 2002 when Freescale joined. The group will dissolve the partnership after it completes its current technology project, 45-nanometer production technology, NXP said in a statement.

The alliance was formed at a time when companies were concerned about the rising cost of chip development. Several such alliances were forged, including one among IBM, Chartered Semiconductor Manufacturing, Infineon Technologies and Samsung Electronics. The latter partnership remains intact.

In a separate statement, NXP said it will strengthen its relationship with TSMC, partnering more closely on advanced research in chip-manufacturing technologies. NXP will also put more emphasis on its outsourcing pact, farming out more chip production to TSMC so it can focus on chip design.

Philips was an original investor in TSMC, when the Taiwanese powerhouse was just a startup. The two companies have maintained a close relationship ever since, and Philips still holds a large share of TSMC stock, as well as a major stake in NXP.

TSMC is the world’s largest contract chip manufacturer.

-Dan Nystedt, IDG News Service (Taipei Bureau)

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