By Joel Hruska
August 04, 2008 - 07:44PM CT

AMD's plan to integrate a CPU and GPU on a single chip, codenamed Fusion, has been a hot topic since the CPU manufacturer first announced it planned to purchase ATI. AMD hasn't had much to say about Fusion lately, beyond confirming that the project exists and is still in development, but new rumors have surfaced over what form Fusion might take when it surfaces in 2009.

Citing "industry sources," DailyTech predicts that Fusion will arrive on a 40nm CPU process, courtesy of TSMC. The odd process size of 40nm is referred to as a half-node, and it represents an intermediate point between two process generations. TSMC has used half-node production for years as a way to smooth its own production cycle, including 55nm, 80nm, and 150nm processes.

TSMC intends to begin its 32nm transition in Q4 of 2009, though the lag time between transition and production is often at least a year. AMD, for example, began 45nm wafer starts this past January, but won't launch 45nm processors in volume until Q1 2009. AMD's predicted use of TSMC as a foundry is something we've discussed before, and it might be the first concrete demonstration of the company's asset lite asset smart strategy in action.

AMD has traditionally produced the vast majority of its chips in-house, but a combination of production constraints and process technology could make TSMC an enticing partner. The first Fusion processors are expected to be a combination of dual-core Phenom and RV800 technology, and packing satisfactory performance into a single die is a challenge that has undoubtedly kept AMD's engineers hopping.