MUNICH, Germany — Sooner than expected by many market watchers, chip manufacturing service provider Globalfoundries has clinched its first strategic customer contract: It is STMicroelectronics.

Globalfoundries will manufacture devices in 40nm Low Power bulk silicon technology for ST. With the multi-year manufacturing contract, ST intends to secure capacity for consumer and wireless products in the first place. "To ensure ample capacity for our customers and partners at the leading-edge of power design, ST needs an agile and high-performance manufacturing partner that can adapt to our changing needs," explained STMicroelectronics Chief Technology Officer Jean-Marc Chery in a press release, adding that he believes that Globalfoundries is the right manufacturing partner for leading-edge low power designs.

Globalfoundries, a California-based joint venture of microprocessor manufacturer AMD and financial investor ATIC, will manufacture the devices for ST in its 300-mm Fab 1 located in Dresden (Germany). The information was rather unspecific in terms of the volume intended. Globalfoundries CEO Doug Grose talked vaguely about "high volumes". The company declined to elaborate on the financial conditions and the share of Globalfoundries' capacity reserved for ST.

For ST, Globalfoundries is not the only foundry partner. Besides running several own wafer fabs in France, Italy and Singapore, ST also has supply contracts with foundry service providers UMC and TSMC. Industry sources pointed out that TSMC currently has problems with its 40nm process, which likely has been a factor in ST's decision to chose Globalfoundries.

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