ARM and TSMC Renew Their Vows

Event Summary

July 20, 2010 - ARM and Taiwan Semiconductor Manufacturing Company, Ltd. jointly announced a long-term agreement that provides TSMC with access to a broad range of ARM processors and enables the development of ARM physical IP across TSMC technology nodes. This agreement supports the companies’ mutual customers to achieve optimized Systems-On-Chip (SoC) based on ARM processors and covers a wide range of process nodes extending down to 20nm.

Quick Take

Analytical Summary

• Current Perspective: Moderate on ARM and TSMC effectively extending their longstanding relationship by jointly revealing a new long-term strategic agreement that gives TSMC access to a wide array of ARM processors and enable the development of ARM physical IP across TSMC nodes. While the latest agreement sustains a long-working alliance, the joint agreement announcement lacked key details in areas such as volume production time frames and expectations related to the 28nm/20nm processes and any bearing the new agreement has on TSMC’s new $9.4 billion 300mm wafer plant.

• Vendor Importance: High to both ARM and TSMC as both companies needed to reassure the mobile silicon community that their ongoing strategic relationship will extend to the 28nm/20nm process realm following on their collaboration in areas such as the 65nm/45nm processes. ARM needed to broadcast its next steps in terms of capitalizing on the next generation of 2xnm process advances while TSMC needed to prove it is well-positioned to counter rival foundry efforts to use the 2xnm generation as a window of opportunity to garnish TSMC’s market share leadership in the overall semiconductor foundry market.

• Market Impact: Moderate on the mobile device silicon market since ARM and TSMC have worked together for many years and the new strategic agreement to apply ARM physical IP to TSMC 28nm/20nm processes and enabling TSMC to access ARM processor technology to optimize implementation of ARM processors in TSMC process technologies will not surprise rivals and oblige direct responses. The ARM/TSMC joint agreement is in keeping with the ongoing trend of fabless silicon processor vendors engaging foundries at ever earlier stages with the goal of reducing the cost and complexity associated with next generation semiconductor manufacturing processes.

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