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Motorola Expands TSMC Manufacturing
Ties
Agreement Signals Next
Milestone in Chipmaker’s Asset-Light Strategy
AUSTIN, Texas – June 26, 2002 – To
provide customers an assured supply of semiconductor products based on fully
compatible process technologies, Motorola Inc. (NYSE:MOT) today announced a
broadened agreement with foundry partner Taiwan Semiconductor Manufacturing
Corporation (TSMC). The arrangement will increase Motorola’s external
manufacturing over the next several years.
Based on a long foundry-partner relationship,
the two companies have significantly enhanced the portfolio of products that
TSMC will build for Motorola. This agreement solidifies the company’s
asset-light strategy for manufacturing utilization.
“Motorola’s asset-light strategy
is aimed at providing customers with embedded solutions based on leadership
technologies and world-class manufacturing,” said Bill Walker, senior vice
president and general manager of Motorola’s Semiconductor Products Sector.
“While our recently announced partnership with STMicroelectronics, Philips
and TSMC is dedicated to breakthrough technology development, this relationship
guarantees us additional access to world-class external manufacturing capacity
aligned with the jointly developed process technology. TSMC’s help in the
rapid execution of our asset-light strategy will further enable us to meet our
customers’ needs.”
For Motorola,
the expanded partnership will result in a significant portion of
Motorola’s outsourced semiconductor manufacturing being provided by TSMC.
The agreement with TSMC enables Motorola to broaden manufacturing capability for
a wide range of technologies, featuring leading-edge CMOS technology, which will
be crucial to producing Motorola’s system-on-chip
products
for high-end applications. TSMC will manufacture
products that are fully compatible with Motorola’s process technologies,
and will enable Motorola to provide an assured supply to its
customers.
Walker
noted that this agreement helps the company provide seamless manufacturing
capacity for its customers. The relationship offers Motorola an assured supply
of external capacity, while reducing fixed costs and lowering the risk
associated with major internal capacity expansions. In addition, it allows
Motorola the flexibility to work with other foundry partners as
needed.
“This agreement further extends
our long-term relationship with Motorola and recognizes the value we see in our
strategic IDM partners,” said TSMC President Rick Tsai. “In
anticipation of this agreement, TSMC earlier this year increased its 2002
capital appropriation to US $2.5 billion for projects including expansion of
300mm manufacturing capacity at Fabs 12 and 14. The appropriation also allows us
to expand the availability of leading-edge technologies. Our total manufacturing
capacity is expected to nearly double to 8 million wafers by the end of 2006,
allowing us to easily satisfy the immediate and future needs of Motorola and all
of our foundry customers around the
globe.”
Aggressive partnering with joint
ventures and foundries is a vital part of Motorola’s plan to focus its
resources on growth of its highly demanded embedded solutions in markets where
the company is positioned to excel.
Motorola
began implementing its asset-light business model a year ago by reducing fixed
asset expenditures through factory consolidations. The company is now executing
on the second phase of its asset-light model through forming partnerships and
joint ventures to minimize risk and provide the benefits of cost-sharing to
acquire access to advanced research, development and future manufacturing.
Motorola is focused on developing differentiating technologies that lead to
exciting higher-value products, as well as licensing its intellectual property
and proliferating technology for increased
revenue.
Financial terms of the agreement were
not disclosed by the two companies.
About Motorola
As the world's # 1 producer of embedded processors,
Motorola's Semiconductor Products Sector creates DigitalDNA™
system-on-chip solutions for a connected world. Our strong focus on wireless
communications and networking enables customers to develop smarter, simpler,
safer and synchronized products for the person, work team, home and automobile.
Motorola's worldwide semiconductor sales were $4.9 billion (USD) in 2001.
http://www.motorola.com/semiconductors
Motorola,
Inc. (NYSE:MOT) is a global leader in providing integrated communications
solutions and embedded electronic solutions. Sales in 2001 were $30 billion.
http://www.motorola.com/
About
TSMC
TSMC is the world's largest dedicated
semiconductor foundry, providing the industry's leading process technology and
the foundry industry's largest portfolio of process-proven library, IP, design
tools and reference flows. The company has one advanced 300mm wafer fab in
production and one under construction, in addition to six eight-inch fabs and
one six-inch wafer fab. TSMC also has substantial capacity commitments at two
joint venture fabs (Vanguard and SSMC) and at its wholly-owned subsidiary,
WaferTech. In early 2001, TSMC became the first IC manufacturer to announce a
90-nanometer technology alignment program with its customers. TSMC's corporate
headquarters are in Hsin-Chu, Taiwan. For more information about TSMC please go
to http://www.tsmc.com.
# #
#
Media Contacts - North
America:
Scott
Stevens
Motorola
+1
(512)
895-7311scott.stevens@motorola.com
Chuck
Byers
TSMC North
America
+1 (408)
382-7919
cbyers@tsmc.com
Media
Contact - Asia/Pacific:
Gloria
Shiu
Motorola
+852-2666-8237gloria.shiu@motorola.com
Media
Contact - Europe:
Steven Sloan
Motorola
+41-22-799-1329
steven.sloan@motorola.com
MOTOROLA,
the Stylized M Logo and all other trademarks indicated as such herein are
trademarks of Motorola, Inc. registered in the U.S. Patent and Trademark Office.
All other product or service names are the property of their respective owners.
(c) 2002 Motorola, Inc. All rights
reserved.
Statements about the impact of the
agreement between Motorola and TSMC are forward-looking statements based on
current expectations and involve risks and uncertainties. Motorola wishes to
caution the reader that the factors below and those on pages F-35 through F-40
of the appendix to Motorola's Proxy Statement for the 2002 annual meeting of
stockholders and in its other SEC filings could cause Motorola's actual results
to differ materially from those stated in the forward-looking statements. These
factors include: (i) a change in demand for semiconductor products, which
affects Motorola's manufacturing requirements; (ii) the potential for
unanticipated results under the agreement; (iii) the level of the two
companies’ success at developing process technology; and (iv) the overall
success of Motorola's asset-light strategy.
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