Microsoft Corp. recently contracted Silicon Integrated Systems (SiS), an affiliate of silicon-foundry supplier United Microelectronics Corp. (UMC), to design south-bridge chip for its Xbox360 game machines.

chips will be made with 0.15-micron process at UMCs 200-mm silicon-wafer fabrication factories, making them a major revenue earner at UMC next quarter. With the contract, SiS becomes first Taiwanese chip designer to lay out chips for Xbox360 machines. The contract is estimated to help boost SiSs shipment of south-bridge chips to multi million units a month in the fourth quarter.

Microsoft contracted Intel and Nvidia to supply chips for its first-generation Xbox machines. As to its Xbox360 products, Microsoft has signed up SiS to design south-bridge chip for it and designs north-bridge chip based on patents licensed from ATI on its own. Taiwan Semiconductor Manufacturing Co. (TSMC), UMCs primary rival, has been contracted to produce north-bridge chips for the machines. Microprocessors in the second-generation game machines will come from International Business Machines (IBM).

Taiwanese industry watchers pointed out that Microsoft decides to design north-bridge chip for its Xbox360 machines and contract TSMC to build the chips considering the unsmooth sales of its first-generation Xbox machines because of high costs on chips it contracted directly from designers.