PARIS — It is now official. STMicroelectronics NV is GlobalFoundries' first strategic customer and will devote a significant portion of its outsourcing to the chip manufacturing service provider, ST told EE Times Europe.

GlobalFoundries, a Californian joint-venture of microprocessor manufacturer AMD and financial investor ATIC, announced today (July 29) it will manufacture devices in 40-nm Low Power bulk silicon technology for ST. Through this multi-year manufacturing contract, ST said it intends to secure capacity for consumer and wireless products in the first place.

At an analysts' conference, Carlo Bozotti, ST's president and CEO, commented on the benefits of such relationship. He declared: "Of course, it is in line with our advanced CMOS strategy. It is an additional source for us, in full alignment and a good opportunity to run smoothly, for instance, the same products in two different facilities."

In a discussion with EE Times Europe, ST's spokesperson highlighted the fact that ST has adopted a fab-lighter strategy and is focusing its manufacturing mostly on proprietary, high value-added derivative processes, while increasingly utilizing subcontracting for standard advanced CMOS technology. ST has supply contracts with foundry service providers UMC and TSMC.

The company's spokesperson continued: "This agreement is therefore aimed at covering the second part of the manufacturing needs of the company and shows no contradiction with the strategy we are adopting. In 2008, we subcontracted around 13 percent of our capacity to all foundries and our target is 20 percent. The majority of this is with preferred foundry partners. We believe that GlobalFoundries will be very competitive and will earn a significant portion of our outsourcing."

ST's spokesperson concluded that This multi-year manufacturing agreement, which runs for several years, is "a demonstration of a coherent approach to our outsourcing, in line with our key participation to the IBM alliance."

In a statement, GlobalFoundries CEO Doug Grose talked vaguely about "high volumes". ST unfortunately declined to give precision on the volume intended.