IBM and Xilinx prepare for production of first 90nm chips on 300mm wafers

IBM first foundry in the world to receive tape-out on 90nm from Xilinx; Next-generation Xilinx FPGAs planned for volume production next year

EAST FISHKILL, N.Y. and SAN JOSE, Calif., December 16, 2002 – IBM and Xilinx, Inc. (NASDAQ: XLNX) today announced a major step toward production of what could be the world's first 90-nanometer (nm) chip. Using IBM's most advanced, copper-based 90nm semiconductor manufacturing process technology, the companies have taped out a new Xilinx field programmable gate array (FPGA) chip design for production in IBM's new 300mm chip fab. The new process technology has resulted in a 50 to 80 percent FPGA chip-size reduction compared to any competing FPGA solution. (90nm is less than 1/1,000th the width of a human hair, and 300mm wafers measure 12 inches. Product "tape out" refers to a key step in the manufacturing process when data required to manufacture a chip is sent to the foundry.)

IBM plans to manufacture the new product line in volume in the second half of 2003 at the company's state-of-the-art 300mm plant in East Fishkill, N.Y. The new IBM $2.5 billion 300mm chip-making facility combines – for the first time anywhere – IBM chip-making breakthroughs such as copper interconnects, silicon-on-insulator (SOI) and low-k dielectric insulation on 300mm wafers. The new facility began operation this year, and will be ramping up in capacity throughout 2003.

Xilinx's investment in 90nm manufacturing technology will enable the company to drive pricing down to under $25 for a one-million-gate FPGA (approximately 17,000 logic cells)* which represents a savings of 35 to 70 percent compared to any competitive offering. Such a significant reduction in pricing is possible due to the remarkable economies of scale involved with moving to next-generation manufacturing processes at increasingly finer geometries to achieve greater device densities and higher yields.

"What we have just accomplished with Xilinx is testament to the fact that we have the most advanced semiconductor technology, chip design and manufacturing capabilities in the industry, " said Michel Mayer, general manager, IBM Microelectronics Division. "Ultimately, this benefits our foundry customers because they leverage our expertise to get their high-performance chips to market as quickly and efficiently as possible. "

Xilinx, one of the pioneers of the fabless semiconductor business model more than 18 years ago, continues to head the race to advanced manufacturing processes and has established an impressive track record of industry firsts – including first to 150nm in 2001 and first to 130nm in 2002. Currently, the company is also the highest volume purchaser of 300mm wafers globally.

"Our collaboration with IBM in developing leading edge manufacturing technologies is a vital component to our success as the market leader in programmable logic, " said Wim Roelandts, Xilinx president and CEO. "Unlike other semiconductor companies – fabless or otherwise – we're moving aggressively toward 90nm to deliver even greater price/performance benefits to our customers, opening up entirely new markets for programmable logic. "

IBM has used Xilinx's FPGAs to prove and test IBM's 130nm – and now 90nm – manufacturing processes. Due to the regular structure and re-programmability of Xilinx devices, defects can be more easily identified and isolated during manufacturing than with traditional, fixed semiconductor device architectures, making them an ideal process driver for a volume manufacturer such as IBM.

Milestone Achievement for IBM-Xilinx Collaboration
Today's news represents a milestone achievement for the manufacturing collaboration between IBM and Xilinx commenced in March of this year. The agreement marked the first time IBM would manufacture high-volume parts for a foundry customer using its most advanced processes, which are normally used in high-end microprocessors, custom chips and memory products. IBM is currently manufacturing Xilinx's flagship VirtexX-II Pro semiconductor products using a 130nm process on 200mm wafers at IBM facilities in Burlington, Vt. and on 300mm wafers at facilities in East Fishkill, N.Y.

In June 2002, the companies announced a second technology agreement under which IBM is licensing FPGA technology from Xilinx for integration into IBM's Cu-08 application specific integrated circuit (ASIC) product offering.

About IBM Microelectronics
IBM Microelectronics is a key contributor to IBM's role as the world's premier information technology supplier. IBM Microelectronics develops, manufactures and markets state-of-the-art semiconductor, ASIC and interconnect technologies, products and services. Its superior integrated solutions can be found in many of the world's best-known electronic brands. IBM is a recognized innovator in the chip industry, having been first with advances like more power-efficient copper wiring in place of aluminum, faster silicon-on-insulator (SOI) and silicon germanium transistors, and improved low-k dielectric insulation between chip wires. These and other innovations have contributed to IBM's standing as the number one U.S. patent holder for nine consecutive years. More information about IBM Microelectronics can be found at: http://www.ibm.com/chips.

About Xilinx
Xilinx, Inc. (NASDAQ: XLNX) is the worldwide leader in programmable logic solutions. Additional information about Xilinx is available at http://www.xilinx.com

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*Projected pricing for 250,000 units at end 2004.