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NEC to build new fab to make chips for Nintendo Dolphin
By Yoshiko Hara
EE Times
(10/18/99, 5:40 p.m. EDT)

TOKYO, NEC Corp. will construct a new fabrication facility to build a
graphic chip and the embedded DRAM that Nintendo Co. Ltd. will use in
its next-generation game console, code-named Dolphin.

NEC decided to build the fab after receiving an order from Nintendo for
the chips. NEC expects to sell about $2.8 billion of the devices over
the full life of Dolphin.

The fab will be built at NEC's facilities on Kyushu, an island in southern
Japan. Construction will begin in November and operation is expected to
begin next August. The line will have a capacity of 10,000 eight-inch
wafers a month.

Sony Computer Entertainment Inc. (SCE) is similarly building separate fabs
to make the components that will power its Playstation 2 console, and
Nintendo's Dolphin unit will likewise be a driving force of the
company's and its supplier's semiconductor business. But Nintendo's
business model

differs from SCE's in that Nintendo will not take part in the fab
investment. Instead, NEC alone will invest about $755 million in the
fab. The investment will be included in NEC's budgets of fiscal 2000 and
2001. "We'll design the new line as a multiple product line. We'll operate
the line at our discretion," said Kanji Sugihara, senior vice president
of NEC.

"That's why we invest all, with no Nintendo participation." The NEC line
will be able to run the 0.13-micron UX4 process that NEC announced
earlier this month, which was developed for system-on-chip devices.

Nintendo outlined the Dolphin structure this past May when it announced
an alliance with Matsushita Electric Industrial Co. Ltd., from which it
will obtain DVD technology, including copy protection. Dolphin will use a
customized 400-MHz PowerPC that will be supplied by IBM Corp., a 200-MHz
DRAM embedded graphic chip developed by ArtX Inc., and high-speed DRAM
with a memory-bus bandwidth of 3.2 Gbytes per second. All these chips will
be fabricated in a 0.18-micron process. NEC intends to eventually shift
the line to 0.13-micron production using the UX4 process.

Hiroshi Yamashita, president of Nintendo, hinted in May that NEC would
supply the graphics chip and high-speed DRAM for Dolphin. NEC has been
supplying the core chips of the current-generation Nintendo 64 player,
including the CPU, so the companies have already established a close
relationship.

NEC will fabricate Nintendo's graphics chip and high-speed DRAM on the same
line. The DRAM will be "an application specific memory" dedicated for use
in Dolphin, said Keiichi Shimakura, associate senior vice president of NEC.

NEC executives provided little detail of the chips, but said the
data-transfer rate of the DRAM would be 3.2 Gbytes/second, which is
faster than Rambus. The 3.2-Gbyte rate is equal to that of Sony's
Playstation 2, which will use Rambus as main memory.

NEC will first install the 0.13-micron UX4 process on a line of its Tsuruoka
fab, located at NEC Yamagata in northern Japan, in the second half of
its current fiscal year, which ends in March. The company will invest about
$142 million on the line, which will begin fabrication using UX4 next April.

"Tsuruoka fab will be the main base of UX4 process technology, but we
decided to make the No. 9 fab as the base of embedded DRAM devices,"
said Shimakura. The company's No. 9 fab will be equipped with optical
scanners featuring KrF lithography to prepare for the UX4 process.

"The load of embedded DRAM chips on a line is heavy," said Shimakura.
"It is impossible to make embedded DRAM chips on our existing lines.
We need a new line."

The first target of the new fab is chips for Dolphin, but the line could
be used for UX4-based chips in the future, Shimakura said.