Cypress Enters Foundry Relationship with UMC

Cypress Semiconductor Corp. (NYSE: CY) has announced the addition of UMC (NYSE: UMC) (TSE: 2303) as one of its primary foundry partners. According to the letter of intent, Cypress will use UMC’s advanced processes for its next-generation SRAM products. This is the first time that Cypress has chosen an external foundry for manufacturing its flagship SRAM products. Cypress expects to tape out its first 65-nm SRAM product at UMC later this year.

In addition to SRAMs, Cypress intends to use UMC for the foundry manufacturing of its S8TM 0.13-micron embedded flash technology and two future generations of embedded flash technology to produce an array of Cypress products, including its PSoC® programmable mixed-signal array and USB devices.

Cypress’s partnership with UMC marks a significant milestone in the company’s Flexible Manufacturing Initiative, which combines capacity from leading foundries with output from Cypress’s internal fabs. The initiative allows Cypress to meet rapid swings in customer demand without the burden of high fixed costs, a capability that is particularly important in high-volume consumer markets that the company serves with its leading programmable product portfolio.

The partnership with UMC is also an important part of Cypress’s “No More Moore” initiative. With many of Cypress’s leading programmable products no longer requiring aggressive linewidth reductions, the company abandoned its longstanding commitment to independent process technology development based on Moore’s Law. With this relationship, Cypress will continue to have access to leading-edge processes for its products that do require world-class manufacturing processes.

“UMC’s advanced technology will allow Cypress to maintain its leadership position without having to shoulder the entire burden of advanced research and equipment,” said Shahin Sharifzadeh, executive vice president of Wafer Fab and Technology at Cypress. “By continuing to add manufacturing capacity with foundry partners like UMC, we will be able to meet the needs of our rapidly growing customer base and accelerate our drive to become a leading programmable solutions provider.”

Henry Liu, senior vice president and head of the New Business Group at UMC, said, “We are delighted to partner with industry leader Cypress. This partnership is truly a win-win situation for Cypress and UMC. Cypress can focus on developing competitive designs and programmable solutions, while UMC gains a valued customer and technology development partner for future process generations.”