IBM, XILINX: MULTI $MILLION MANUFACTURING DEAL.

IBM and Xilinx recently announced a two-year, multi-million dollar agreement under which IBM will manufacture the newly-announced Xilinx Virtex-II Pro semiconductor products.

IBM plans to manufacture the parts for Xilinx using IBM's most advanced 0.13 and 0.10 micron (a micron is a millionth of a meter) copper-based chip-making technology. This is the first time IBM will manufacture high-volume parts for a foundry customer using its most advanced processes, normally used in high-end microprocessors, custom chips and memory products.

The Xilinx products will be manufactured at IBM facilities in Burlington, Vermont and East Fishkill, New York. The Xilinx Virtex-II Pro products are the first of its kind in off-the-shelf programmable system available to the engineering community that will enable new innovations to be taken to market rapidly and at a lower total cost to corporations.

"As one of the world's largest fabless semiconductor companies, the decision to team with IBM for the manufacture of our products was a natural, from both a technical and a business standpoint," said Wim Roelandts, president and CEO at Xilinx. "The Virtex-II Pro devices bring together IBM's leading PowerPC embedded processor technology with Xilinx's expertise in programmable (FPGA) technology. Our collaboration enables us to serve a five billion dollar opportunity and assures our customers a world-class source of supply."

The Virtex-II Pro products are the result of a collaborative design effort between the two companies, integrating IBM's PowerPC microprocessor with Xilinx field programmable gate array (FPGA) technology to form a new type of hybrid chip for use in communications, storage, and consumer applications.

"We're expanding our work with customers like Xilinx, who recognize that leading-edge technology, and the design expertise to exploit it, are critical to building today's semiconductors products," said Michel Mayer, general manager, IBM Microelectronics. "By fully integrating our PowerPC with Xilinx's FPGA chips, we've developed a new design and development model. Now, by optimizing those designs with our advanced manufacturing processes, we've developed a new performance and supply model."

IBM and Xilinx had originally announced in July, 2000 their plans to develop a hybrid approach to developing custom chips, combining Xilinx FPGA and IBM PowerPC microprocessor technology. With Xilinx's announcement of the resulting Virtex-II Pro products, backed by this manufacturing agreement with IBM, customers can now take advantage of this unique platform.