"We're moving to 90nm with our eyes wide open, and we're confident with where TSMC is," said John Daane, chief executive of the San Jose-based programmable logic supplier.

Daane's optimism stems in large part from Altera's closeness with TSMC, its exclusive foundry source for the past 10 years. TSMC last week presented Altera with a sculpture to commemorate the partnership, which has evolved from a pure wafer supply arrangement to a strategic technology collaboration.

"I think our relationship with Altera is preeminent in the area of technology collaboration," said Ed Ross, president of TSMC North America in San Jose. "Their R&D people are right in the fab with our guys, they're in the nits and grits of what's going on in terms of technology development, and there's complete visibility into every thing that's happening.

"The thing that really puts the fine point on it is that John Daane doesn't have to get involved in the operational stuff. There's no question that when issues come up--and they do come up--it's going to get resolved," Ross said.

It also helps that many of the technical hurdles manufacturers are facing with the 90nm transition were confronted by TSMC at the 0.13-micron node, he said.

"As we moved to 0.13, we changed lithography and we also changed materials, because we went to full copper interconnects and low-k dielectrics," Ross said. "The change to 90nm for us is just lithography.

"Altera was our first customer on copper. That was a huge debugging exercise for us," he said. "The risk--which took quite some time to take care of at 0.13--is under control, and I think the transition to 90nm will be non-problematic."

Despite much prodding by the investment community, Daane said Altera never considered bringing in a second foundry source to help mitigate potential supply disruptions.

The single-fab strategy is in stark contrast to that of rival Xilinx Inc., which tapped IBM Corp. as a backup to longtime foundry partner

By: Docmemory
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