Contract chip maker Chartered Semiconductor Manufacturing Ltd. on Wednesday announced a three-year 300-millimetre manufacturing and technology development agreement with IBM Corp. "We believe that cost-effective 300-millimetre manufacturing capability will become a key differentiator in our industry," said Chia Song Hwee, president and chief executive officer at Chartered, in a conference call with analysts and media Wednesday. Chartered, which lags far behind rivals Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) and United Microelectronics Corp. (UMC) in semiconductor manufacturing using 300-millimetre (12-inch) wafers, sees the deal with IBM as a chance to make up some ground in the market. "We expect that both parties will be able to gain early scale and cost efficiency on 300-millimetre manufacturing while at the same time reducing risk," Chia said. The shift to 300-millimetre wafers from 200-millimetre (8-inch) wafers offers significant cost savings for chip makers.