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AMD spinoff lands top chip company as customer

On Wednesday, Globalfoundries is announcing a deal with STMicroelectronics, its first instance of making chips for a company other than AMD.

Globalfoundries, the manufacturing concern spun off from Advanced Micro Devices, plans to announce Wednesday that it has signed up STMicroelectronics--its first true outside customer.

STMicroelectronics supplies the accelerometer for the iPhone 3GS
STMicroelectronics supplies the accelerometer for the iPhone 3GS Apple

Globalfoundries was created last year in order to eliminate the crippling overhead that AMD was incurring to manufacture its processors. Globalfoundries now conducts business as a contract chip manufacturer, commonly referred to as a foundry.

AMD owns 34.2 percent of the company, while Advanced Technology Investment Co. owns the rest. ATIC is an investment company wholly owned by the government of Abu Dhabi, which is part of the United Arab Emirates.

Last week, Globalfoundries broke ground on a $4.2 billion facility in Malta, N.Y., that is expected to put it among the elite chipmakers of the world. Currently, Globalfoundries manufactures chips for AMD at facilities in Dresden, Germany.

STMicroelectronics will commission Globalfoundries to make low-power chips using a 40-nanometer process, which "is ideal for the next generation of wireless applications, handheld devices, and consumer electronics," according to a statement. Production is slated for 2010.

Currently, the most advanced manufacturing processes in the chip industry are at the 34-nanometer level--which Intel uses to manufacture flash memory chips. More typically, chips are made on advanced processes ranging between 40 and 50 nanometers. Generally, the smaller the chip's geometries, the faster and more power efficient it is.

Globalfoundries would not say what specific types of chips it will make for STMicroelectronics, whose product portfolio includes memory, microcontrollers, power management silicon, and MEMS or Micro-Electro-Mechanical Systems.

One of the highest profile products STMicroelectronics supplies today is the accelerometer for the iPhone 3GS. Based on MEMS technology, the accelerometer allows the 3GS to determine device orientation or inclination.

STMicroelectronics was ranked among the top 5 chipmakers in the world based on revenue in 2008, according to market researcher iSuppli.