Sun is considering handing over the production of its low-end UltraSparc II processor to chip foundry UMC, the head of the company's processor products division has admitted.

Questioned by the Taiwanese media at the local launch of Sun's E15000 server this week, David Yen, Sun VP and general manager of its processor operation, said the company is investigating the economic and technology advantages of outsourcing UltraSparc II production.

If there are savings to be made by such a move, Sun may also outsource UltraSparc III production, Yen suggested.

Sun's UltraSparc processors are currently fabbed by Texas Instruments. However, Yen admitted that the company is talking to UMC after establishing a dialogue early this year. Sun is also believed to have approached UMC's main rival and the world's largest chip foundry, TSMC.

Yen indicated that Sun expects the Taiwanese foundries to cut around ten per cent off the cost of fabbing UltraSparcs at TI if they want the production contract - which could amount to more than one million chips a year. ®