Document:

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                                                                  EXHIBIT 10.6

                           TRADE FINANCING AGREEMENT

This AGREEMENT is made and entered into as of the first day of February, 1999 by
and between Centillium Technology Corporation, a company organized and existing
under the laws of California, having an office and place of business at 46531
Fremont Boulevard, Fremont, California 94538 (hereinafter referred to as "CTC")
and Mitsubishi International Corporation, a company organized and existing under
the laws of New York, U.S.A., having an office and place of business at 850
Hansen Way, Suite 100, Palo Alto, California 94306 (hereinafter referred to as
"MIC").

                                  WITNESSETH:

WHEREAS, CTC has been engaged in the business of designing and selling
semiconductors (hereafter referred to as "Products"), and

WHEREAS, MIC has for many years engaged in the business of international trading
and trade financing.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto agree as follows:

1.   APPOINTMENT
     -----------

CTC hereby appoints MIC as its non-exclusive buying agent for purchasing of
Products from semiconductor manufacturers (hereinafter referred to as
"Foundries") and providing MIC's trade financing to CTC and MIC accepts such an
appointment.

2.   SCOPE OF WORK
     -------------

     a.   CTC shall negotiate and settle directly with Foundries regarding
          prices, other payment terms and delivery schedule of Products from
          Foundries to CTC.

     b.   Upon request of CTC, MIC shall support negotiations between Foundries
          and CTC.

     c.   CTC shall place purchase orders with Foundries for Products and send
          copies to MIC with the following provisions:

          (1)  CTC shall notify MIC 2 days prior to its issuance of the purchase
               order.

          (2)  The purchase order shall instruct Foundries to ship Products to
               CTC's designated location but to deliver appropriate invoices to
               MIC and to accept payment from MIC.

          (3)  The purchase order shall instruct Foundries to acknowledge in
               writing the order to both CTC and MIC.

     d.   MIC on behalf of CTC shall pay Foundries pursuant to payment terms of
          the purchase order from CTC to Foundries.

                                      -1-
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     e.   MIC shall bill CTC upon receipt of the invoice from Foundries but
          defer the due date for payment from CTC to MIC for 90 days beyond the
          due date for the payment from MIC to Foundries.

     f.   Upon CTC's request, MIC shall assist CTC in establishing and keeping
          close communications and relations with Foundries.

3.   TERMS OF PAYMENT
     ----------------

     a.   Payment to be made by CTC to MIC shall be net 120 days after the
          delivery of Products from Foundries.

     b.   The invoice amount from MIC to CTC shall include MIC's commission and
          interest.

     c.   In the event that MIC pays Foundries in Japanese Yen,

          (1)  MIC shall apply the tentative exchange rate in computing CTC's
               liability to MIC prior to the payment date from MIC to Foundries.
               The exchange rate used by MIC will be stated on the face of the
               invoice.

          (2)  The US$/Japanese Yen exchange rate for the date when MIC pays
               Foundries shall be applied to the invoice from MIC to CTC. A
               revised invoice will be issued to CTC with the new exchange rate
               used by MIC stated on the face of the revised invoice.

          (3)  CTC shall have the option to pay MIC in either US Dollars or in
               Japanese Yen. In the event that CTC shall pay MIC in Japanese Yen
               for MIC's invoice to CTC, CTC shall give a written notice at
               least five (5) business days prior to MIC's payment of required
               Japanese Yen amount to Foundries.

     d.   In the event that CTC requires MIC to execute a forward foreign
          exchange contract in order to fix the US$/Japanese Yen exchange rate
          for a specified future period,

          (1)  CTC shall give MIC a written request at least one (1) business
               day before the day when MIC shall execute the forward foreign
               exchange contract.

          (2)  CTC shall give MIC the written request no later than five (5)
               business days prior to MIC's payment of required Japanese Yen
               amount to Foundries.

          (3)  The written request from CTC to MIC shall state the following
               details:

               i)   Date of Request
               ii)  Calendar month in which Japanese Yen amount is required
               iii) Required amount of Japanese Yen
               iv)  Schedule of shipment to which the forward foreign exchange
                    contract shall be applied

                                      -2-
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          (4)  MIC shall inform CTC of the contracted forward foreign exchange
               rate and the corresponding US$ amount to purchase the Japanese
               Yen amount within two (2) business days of CTC's written request.

          (5)  Any reasonable charges caused by the cancellation and/or
               extension of the forward foreign exchange contract shall be the
               paid by CTC.

          (6)  In the event that MIC's payment amount to Foundries does not
               reach the forward foreign exchange contract amount for a
               particular calendar month, CTC shall have the option to purchase
               the Japanese Yen by using the remaining balance of the forward
               foreign exchange contract.

               CTC shall give MIC a written request at least 10 business days
               prior to the end of the month. MIC shall make a T.T. Remittance
               of the purchased Japanese Yen amount to CTC's bank account after
               MIC confirms receipt of CTC's payment of the US$ amount
               equivalent to the remaining Japanese Yen balance amount to MIC's
               bank account.

4.   COMMISSION
     ----------

     a.   As full compensation for the services rendered by MIC to CTC
          hereunder, CTC agrees to a commission at the rate set forth in
          Subsection 4.b on the price of each sale of Products from MIC to CTC

     b.   The commission for each month shall be determined on the first day of
          each month as follows:

          (1)  In the event that the total sales amount from MIC to CTC in the
               previous month shall be equal to or less than $1,000,000, the
               commission rate for the calendar month shall be 2% of the
               purchase price of Products from Foundries to MIC.

          (2)  In the event that the total sales amount from MIC to CTC in the
               previous month shall be more than $1,000,000, the commission rate
               for the calendar month shall be 1.50% of the purchase price of
               the Products from Foundries to MIC.

          (3)  If there is a need to change the commission rate, the rate shall
               be reviewed and determined by written mutual agreement between
               CTC and MIC from time to time at the request of either party.

5.   INTEREST
     --------

     a.   The trade financing made hereunder shall bear interest (computed on
          the basis of the 365-day year) at the rate of MIC's internal interest
          rate on each order from CTC to MIC.

     b.   MIC's internal interest rate to CTC shall be adjusted subject to the
          USA financial market situation, but at least 1.0% below the prime rate
          of interest as published in the Wall Street Journal on the date of the
          invoice.

     c.   MIC shall confirm to CTC MIC's internal interest rate upon receipt of
          each order from CTC.

                                      -3-
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6.   CREDIT LINE
     -----------

     a.   The credit line and the period of the credit line from MIC to CTC
          shall be set forth in Exhibit A attached hereto.

     b.   The subsequent credit line and the period of the subsequent credit
          line shall be determined by the end of the period of the credit line
          set forth in Exhibit A by mutual agreement.

7.   EVENT OF DEFAULT
     ----------------

     a.   Each of the following events and occurrences shall constitute an event
          of default ("Event of Default") under this Agreement:

          (1)  CTC fails to pay when due any amount (including interest) payable
               under this Agreement and such failure is not cured within 5
               business days thereafter;

          (2)  CTC fails to comply with any other terms or conditions contained
               herein and such failure is not remedied within thirty (30) days
               thereafter;

          (3)  CTC is in default of the terms of any indebtedness of CTC to any
               other lender or financier and such indebtedness is accelerated
               and becomes payable by reason of such default;

          (4)  the commencement of proceedings in bankruptcy, or for
               reorganization of CTC under the Federal Bankruptcy Code, as
               amended, or any other laws, whether state or federal, for the
               benefit of the debtor, which are not revoked within sixty (60)
               days of their commencement;

          (5)  the appointment of a receiver, trustee or custodian for CTC or
               for the substantial part of the assets of CTC, or the institution
               of proceedings for dissolution or the full or partial liquidation
               of CTC, and such receiver, trustee or custodian shall not be
               discharged within sixty (60) days of their appointment;

          (6)  the discontinuance of the business of CTC; or

          (7)  the dissolution of CTC.

     b.   If an Event of Default shall occur and be continuing, MIC may, by
          written notice to CTC, (1) declare all outstanding amounts, together
          with accrued interest and any other sums payable hereunder, to be
          immediately due and payable, and the same shall thereupon become due
          and payable without presentment, demand, protest or notice of any
          kind, and CTC shall pay to MIC the entire amount then outstanding and
          interest accrued thereon, and (2) declare the credit line granted by
          MIC hereunder canceled, such cancellation becoming effective upon the
          giving of such notice.

                                      -4-
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8.   SECURITY AGREEMENT AND GUARANTY
     -------------------------------

     MIC's obligations under this Agreement, shall not become effective unless
     and until CTC shall enter into and deliver a General Security Agreement
     with MIC in the form of Exhibit B attached hereto by which CTC agrees to
     grant a security interest in the collateral identified in the General
     Security Agreement as a security for the payments to be made by CTC
     hereunder.

9.   TERMS AND TERMINATION
     ---------------------

     This Agreement shall be in effect for a period of one (1) year commencing
     on the date first above written and shall be extended for one (1) year and
     thereafter from year to year successively unless a notice is given by one
     of the parties to the other at least ninety (90) days before the end of the
     then current term that it does not wish to extend this Agreement.

10.  RELATIONSHIP BETWEEN THE PARTIES
     --------------------------------

     The relationship between CTC and MIC shall be that of an independent
     contractor. Unless otherwise mutually agreed, MIC is not authorized to
     make, nor shall it make any promise or commitment which binds CTC to any
     third party without the prior written consent of CTC.

11.  CONFIDENTIAL INFORMATION
     ------------------------

     a.   "Confidential Information" means all or any portion of information
          disclosed by one party to the other during the term of this Agreement
          which is: (i) written, recorded, graphical, or in other tangible form
          and which is marked "Proprietary," "Confidential" or with a similar
          legend denoting the proprietary interest of the disclosing party; or
          (ii) oral information to the extent it is identified by the disclosing
          party as "Proprietary" or "Confidential" at the time of oral
          disclosure; provided, however, Confidential Information shall not
          include information that: (a) is or becomes publicly known through no
          fault of the receiving party; or (b) is in the possession of the
          receiving party prior to its disclosure by the disclosing party and
          not subject to other restriction on disclosure.

     b.   Each party hereby agrees not to use, utilize, disclose or reveal
          Confidential Information to any person, company or other entities
          without obtaining written consent by the disclosing party.

12.  ASSIGNMENT
     ----------

     It is agreed that this Agreement and the rights and obligations of the
     parties hereunder shall not be assigned to any third party without the
     prior written consent of the other party.

13.  INDEMNIFICATION
     ---------------

     CTC hereby agrees to indemnify, defend and hold MIC harmless from and
     against any and all losses, costs, liabilities, claims and expenses
     including attorney fees (Indemnifiable Expenses) arising out of, relating
     to or in connection with Products or their infringement of any patent,
     copyright or mask work right of any third party,

                                      -5-
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     or the design, manufacture, condition or use of Products other than
     Indemnifiable Expenses which arise solely due to an omission to act by MIC.

14.  NOTICE
     ------

     Notices and other communications made by one of the parties to this
     Agreement shall be deemed given and effective upon receipt when posted by
     registered mail, postage prepaid, sent by overnight courier or transmitted
     by facsimile addressed to the other party as follows:

     To CTC:

     Centillium Technology Corporation
     46531 Fremont Boulevard
     Fremont, California 94538

     Facsimile Number: (510) 252-7804

     To MIC:

     Mitsubishi International Corporation
     850 Hansen Way, Suite 100
     Palo Alto, California 94306

     Facsimile Number: (650) 493-0318

15.  GOVERNING LAW
     -------------

     This Agreement shall be governed by and construed in all respects in
     accordance with the laws of California, U.S.A.

16.  ENTIRE AGREEMENT
     ----------------

     This Agreement represents the entire agreement between the parties hereto
     with respect to the subject matter hereof and shall supersede all previous
     communications, representations or agreements, either oral or written,
     between the parties hereto with respect to the subject matter hereof, and
     no agreement or understanding varying or extending the same will be binding
     upon either party hereto unless in writing, signed by a duly authorized
     officer or representative thereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed in duplicate, each duplicate to serve as an original as of the day and
year first above written.

Centillium Technology Corporation         Mitsubishi International Corporation

/s/ A. Travis White                       /s/ Masayoshi Hirano
-------------------                       --------------------
Travis White                              Masayoshi Hirano
President &                               General Manager
Chief Executive Officer                   Palo Alto Office

                                      -6-
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                                   Exhibit A

                                  CREDIT LINE
                                  -----------

CTC and MIC agree with the credit line and credit line period from MIC to CTC as
follows:

CREDIT LINE:        US$ 1,000,000
CREDIT LINE PERIOD: From February 1, 1999 to January 31, 2000

The credit line after 2000 shall be determined by the end of January, 2000 by
mutual agreement between CTC and MIC.

Mitsubishi International Corporation        Centillium Technology Corporation

/s/ Masayoshi Hirano                         /s/ Travis White
--------------------------                   ----------------------
By:    Masayoshi Hirano                      By:    Travis White
Title: General Manager                       Title: President & CEO

                                      -7-
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                                   Exhibit B

                          GENERAL SECURITY AGREEMENT
                          --------------------------

     This General Security Agreement (the "Agreement") made this first day of
February 1999, between Mitsubishi International Corporation, a company organized
and existing under the laws of New York (herein called "Secured Party") and
Centillium Technology Corporation, a company organized and existing under the
laws of California (herein called "Debtor").

     A.   Debtor and Secured Party have entered into that certain Trade
Financing Agreement of even date herewith, wherein Secured Party shall provide
trade financing to Debtor (the "Trade Financing Agreement");

     B.   It is a condition precedent to Secured Party's obligations under the
Trade Financing Agreement, that Debtor shall grant security interests to Secured
Party pursuant to the terms and conditions set forth herein.

     1.   DEFINITIONS OF TERMS USED HEREIN
          --------------------------------

     (a)  "Insolvency" for purposes of this Agreement shall include, but is not
limited to,

                                      -1-
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          (1)  the insolvency, suspension of usual business, general assignment
or failure of the Debtor, or of any endorser, guarantor, surety or other person
liable upon or for any of the liabilities of the Debtor hereunder (hereafter
sometimes referred to as "accommodation party"), or

          (2)  the appointment of a receiver, conservator, rehabilitator or
similar officer for the Debtor or accommodation party or for any of the property
of any hereof and such receiver, conservator, rehabilitator or similar officer
is not discharged within 45 days, or

          (3)  the issuance of any warrant of attachment against any property of
the Debtor or any accommodation party, that remains unbonded for a period of 45
days, or the taking of possession of, or assumption of control over, all or any
substantial party of the property of the Debtor or any accommodation party by
the United States government, foreign governments (de facto or de jure) or any
agency of any thereof, or

          (4)  the filing of a petition in bankruptcy by Debtor or against the
Debtor or accommodation party which is not discharged within 45 days, or

          (5)  the commencement of any proceeding by Debtor or against the
Debtor or any accommodation party under any bankruptcy or debtor's law (or
similar law analogous in purpose or effect) for the relief or reorganization,
extension, arrangement or readjustment of any of the obligations of any thereof,
and which proceeding is not dismissed within 45 days, or

                                      -2-
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          (6)  the commencement of any proceedings supplementary to any
execution relating to any judgment against the Debtor or any accommodation
party.

     (b)  "Collateral" means, whether now owned or hereafter acquired:

          (1)  all inventory in all of its forms, wherever located, now or
hereafter existing (including, without limitation, (i) all integrated circuits
and semiconductor products, and all raw materials and work-in-process therefor,
finished goods thereof and materials used or consumed in the manufacture or
production thereof, (ii) all goods in which the Debtor has an interest in mass
or a joint or other interest or right of any kind (including, without
limitation, goods in which the Debtor has an interest or right as consignee) and
(iii) all goods that are returned to or repossessed by the Debtor), and all
accessions to any of the foregoing, products of any of the foregoing and
documents for any of the foregoing (any and all such inventory, accessions,
products and documents herein called the "Inventory");

          (2)  all accounts, contract rights, chattel paper, instruments,
general intangibles and other obligations of any kind (including, without
limitation, all rights to purchase and receive integrated circuits or
semiconductor products, to receive payments of money or to receive other value
pursuant to contracts, agreements or other arrangements with third parties for
the purchasing, trading, lending, borrowing or exchanging of integrated circuits
or semiconductor products), now or hereafter existing, whether or not arising
out of or in connection with the sale or lease of goods or the rendering of
services, and all rights now or hereafter existing in and to all security
agreements, leases and other contracts securing or otherwise relating to any
such accounts, contract rights, chattel paper, instruments, general intangibles
or obligations (any and all such accounts, contract rights, chattel paper,
instruments, general intangibles, obligations and rights, to the extent not

                                      -3-
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described in Section 1(b)(3) below, herein called the "Receivables," and any and
all such leases, security agreements and other contracts herein called the
"Related Contracts");

     (3)  all of the following (the "Deposit Account Collateral"):

          a.   any and all cash or deposit accounts of Debtor, including,
without limitation, but not limited to, the accounts set forth on Schedule 1
attached hereto (the "Deposit Accounts"), all funds held therein and all
certificates and instruments, if any, from time to time representing or
evidencing the Deposit Accounts;

          b.   all investment property held in or through, or represented by,
the Deposit Accounts from time to time, including, without limitation, all
securities, security entitlements as securities accounts, so held or represented
and all certificates and instrument, if any, from time to time representing or
evidencing the same;

          c.   all notes, certificates of deposit, deposit accounts, checks and
other instruments from time to time delivered to or otherwise possessed by the
Secured Party for or on behalf of the Debtor in substitution for or in addition
to any or all of the then existing Deposit Account Collateral; and

          d.   all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the then existing Deposit Account Collateral; and

          (4)  all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of any type
described in Section l(b)(1), (2) or (3)) and, to the extent not otherwise
included, all (i) books and records, of

                                      -4-
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whatever nature and in whatever form, relating to the foregoing, (ii) payments
under insurance (whether or not the Secured Party is the loss payee thereof), or
under any indemnity, warranty or guaranty, payable by reason of loss or damage
to or otherwise with respect to any of the foregoing Collateral and (iii) cash.

2.   SECURITY INTEREST
     -----------------

     The Debtor hereby pledges and assigns to the Secured Party and hereby
grants to the Secured Party a security interest in all of Debtor's right, title
and interest in and to the Collateral in order to secure payment and performance
of all liabilities and obligations of Debtor to the Secured Party arising from
the payment and performance of all of Debtor's liabilities, duties, and
obligations now or hereafter existing under or in connection with the Trade
Financing Agreement whether for principal, interest, fees, expenses,
indemnification or otherwise, and all obligations of the Debtor under this
Agreement (all being hereafter called the "Obligations").

     3.   SALE OF MATERIALS
          -----------------

     Subject to the terms and provisions of this Agreement and in consideration
of the security interests herein granted, the Secured Party will, from time to
time, but on such terms and conditions as Secured Party may specify and subject
to its absolute right to refuse so to do, sell or cause any of its
correspondents to sell to Debtor materials or goods produced by or services
performed by Foundries, at the request of or for the account of the Debtor.

                                      -5-
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     4.   MUTUAL AGREEMENT
          ----------------

     (a)  Without limiting the foregoing in any way whatsoever, the security
interest created herein shall extend, apply and continue to any and all future
sales of materials or goods or services by the Secured Party or its
representatives or agents to Debtor, and

     (b)  Secured Party and Debtor as used in this Agreement include the
successor and assigns of those parties, and

     (c)  The law governing the interpretation of this Agreement, the security
interests created by this Agreement and the perfection of such security
interests shall be that of the State of California, and

     (d)  This Agreement shall be given its plain and simple meaning consistent
with performance thereof by the parties and the California Commercial Code. The
titles of the several articles shall not be considered a part of this Agreement
so as to otherwise alter such meaning, and

     (e)  Neither party hereto shall be deemed to have waived any of its rights
hereunder unless such waiver be in writing and signed by the party making such
waiver, and

     (f)  Whenever in this Agreement the context so requires, the singular shall
include the plural, and

                                      -6-
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     (g)  This Agreement shall terminate after written notice from either party
to the other, that no further sales of semiconductor products from Foundries to
Debtor are to be made, is received and Debtor pays in full all obligations and
all indebtedness of Debtor to the Secured Party, and

     (h)  This Agreement shall take effect immediately upon execution by the
Debtor, and the execution hereof by the Secured Party shall not be required as a
condition to the effectiveness of this Agreement. The provision for execution of
this Agreement by the Secured Party is only for the purpose of filing this
Agreement as a security agreement under the Uniform Commercial Code, if
execution hereof by the Secured Party is required for purpose of such filing.

     5.   REPRESENTATIONS AND WARRANTIES BY DEBTOR
          ----------------------------------------

     Debtor hereby represents and warrants the following:

     (a)  Debtor's mailing address is:
          Centillium Technology Corporation
          46531 Fremont Boulevard
          Fremont, California 94538

          The address of Debtor's chief executive office is:

          Centillium Technology Corporation
          46531 Fremont Boulevard
          Fremont, California 94538

                                      -7-
<PAGE>

          The address at which Debtor keeps all of its records which are
controlling for the general accounting purposes of Debtor is:

          Centillium Technology Corporation
          46531 Fremont Boulevard
          Fremont, California 94538

          All Inventory presently held by Debtor is kept at the following
locations:

          Centillium Technology Corporation
          46531 Fremont Boulevard
          Fremont, California 94538

     (b)  Debtor is a company duly organized, existing and in good standing
under the laws of California and is duly qualified to transact intrastate
business and is in good standing in the State of California and in each other
state in which it owns or leases any material property and conducts any material
business, and Debtor is empowered to enter into this Agreement.

     (c)  All information supplied and statements made by Debtor in any
financial, credit or accounting statement presented to the Secured Party, if
any, prior to or pursuant to this Agreement are or will be true and correct.
Quarterly financial statements are subject to normal year-end adjustment.

     (d)  The Debtor is the legal and beneficial owner of the Collateral, free
and clear of any lien other than the security interest created by this
Agreement. No effective financing

                                      -8-
<PAGE>

statement or other instrument similar in effect covering all or any part of the
Collateral is on file in any recording office, except such as may have been
filed in favor of the Secured Party relating to this Agreement.

     (e)  The Debtor does not maintain any cash or other deposit accounts other
than the deposit accounts listed on Schedule 1.

     (f)  None of the Receivables is evidenced by a promissory note or other
instrument or by chattel paper.

     (g)  The Debtor has exclusive possession and control of the Inventory.

     6.   DUTIES AND OBLIGATIONS OF DEBTOR
          --------------------------------

     (a)  Without the prior written consent of the Secured Party, the Debtor
will not file or authorize or permit to be filed in any jurisdiction any
financing or like statement with respect to the Collateral in which the Secured
Party is not named as the sole secured party.

     (b)  Debtor will have and maintain insurance at all times with respect to
all inventory and goods, including, without limitation, goods in transit, at
their full insurable value against risk of fire (including, without limitation,
so-called extended coverage), theft, and all other usual risks and such special
risks as the Secured Party may reasonably designate, in such form, for such
periods and written by such companies as may be satisfactory to Secured Party,
such insurance to be payable to the Secured Party and Debtor as their interests
may appear, that all policies of insurance shall provide for ten (10) days,
written minimum cancellation notice to the Secured Party and at the request of
the Secured Party shall be delivered to and held by it. In the event of failure
by Debtor to provide

                                      -9-
<PAGE>

insurance as herein provided, Secured Party may, at Secured Party's option,
provide such insurance and Debtor shall pay to Secured Party the costs of such
insurance and Secured Party may, at Secured Party's option, declare Debtor in
default and proceed with its remedies granted herein.

     (c)  Debtor shall defend at its cost any claim that (i) it does not have
good and valid title to the Collateral, or that (ii) this Agreement does not
constitute a valid first priority lien and charge upon the Collateral. The
assertion by anyone of any claim shall not constitute a default hereunder if
such claim is diligently, adequately and successfully contested by Debtor or is
settled or discharged by Debtor with reasonable diligence. In the event of
failure by the Debtor to diligently defend or contest any such claim, Secured
Party may, at Secured Party's option, contest, settle or discharge any such
claim, and Debtor shall pay to Secured Party, on demand, the reasonable cost and
expense, including, without limitation, attorney's fees, thereof.

     (d)  As to Deposit Accounts.

        (1)  All certificates and instruments, if any, representing or
evidencing the Deposit Account Collateral shall be delivered to and held by or
on behalf of the Secured Party pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Secured Party. The Secured Party shall have the right, at any time in its
discretion and without notice to the Debtor, to transfer to or register in the
name of the Secured Party or any of its nominees any or all of the Deposit
Account Collateral. In addition, the Secured Party shall have the right at any
time to exchange any certificates or instruments representing or evidencing any
Deposit Account Collateral for certificates or instruments of smaller or larger
denominations.

                                     -10-
<PAGE>

          (2)  So long as any of the Obligations remains unpaid, the Borrower
will observe the agreements set forth below.

               a.  The Debtor will maintain the deposit accounts set forth on
Schedule 1 with the Silicon Valley Bank and Morgan Stanley & Co., Inc.
respectively. The Debtor will not maintain any cash or other deposit accounts
with any financial or other institutions other than the deposit accounts set
forth on Schedule 1 without the prior written consent of the Secured Party.

               b.  It shall be a term and condition of the Deposit Accounts,
notwithstanding any term or condition to the contrary in any other agreement
relating to the Deposit Accounts, that (i) so long as no Default or Event of
Default has occurred and is continuing, amounts held in the Deposit Accounts may
be withdrawn to or for the account of the Borrower at any time; and (ii) if a
Default or an Event of Default occurs and is continuing, no amount (including
interest on and other proceeds of the cash and other property held in the
Deposit Accounts) shall be paid or released to or for the account of, or
withdrawn by or for the account of, the Debtor from any of the Deposit Accounts,
except in accordance with the terms of Section 14.

     (e)   As to Inventory.

           (1)  The Debtor will keep the Inventory (other than Inventory sold in
the ordinary course of business) at the places therefor specified in Section
5(a) or, upon 30 days' prior written notice to the Secured Party, at other
places in jurisdictions where all action required by Section 12(b)(2) has been
taken with respect to the Inventory; provided,
                                     --------

                                     -11-
<PAGE>

however, that in no event shall any Inventory be located outside the United
-------
States of America; and

           (2)  The Debtor will pay promptly when due all property and other
taxes, assessments and governmental charges or levies imposed upon, and all
claims (including, without limitation, claims for labor, materials and supplies)
against, the Inventory, except to the extent that the validity thereof is being
contested in good faith and by proper proceedings and that appropriate reserves
are being maintained therefor.

     (f)   As to Receivables.

           (1)  The Debtor will keep its place of business or, if it has more
than one place of business, its chief executive officer and the office where it
keeps its records concerning the Receivables at the location therefor specified
in Section 5(a) or, upon 30 days' prior written notice to the Secured Party, at
other locations in jurisdictions where all actions required by Section 12(b)(2)
have been taken with respect to Receivables; provided, however, that in no event
                                             --------  -------
shall any of the Debtor's records concerning Receivables be located outside the
United States of America. The Debtor will hold and preserve such records and
will permit representatives of the Secured Party at any time during normal
business hours to inspect and make abstracts from such records.

     7.    DEBTOR REMAINS LIABLE.  Anything herein to the contrary
           ---------------------
notwithstanding, (a) the Debtor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Secured Party of any of
its rights hereunder shall not release the Debtor from any of its duties or
obligations under the contracts and agreements included in the

                                     -12-
<PAGE>

Collateral, and (c) the Secured Party shall not have any obligation or liability
under the contracts and agreements included in the Collateral by reason of this
Agreement and shall not be obligated to perform any of the obligations or duties
of the Debtor thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.

     8.   TRANSFERS AND OTHER LIENS. The Debtor agrees that it will not (a)
          -------------------------
sell, assign (by operation of law or otherwise) or otherwise dispose of, or
grant any option with respect to, any of the Collateral, except for sales of
Inventory in the ordinary course of business, or (b) create or permit to exist
any lien upon or with respect to any of the Collateral, except for the security
interest created by this Agreement.

     9.   SECURED PARTY APPOINTED ATTORNEY-IN-FACT. The Debtor hereby
          ----------------------------------------
irrevocably appoints the Secured Party the Debtor's attorney-in-fact, with full
authority in the place and stead of the Debtor and in the name of the Debtor or
otherwise, from time to time in the Secured Party's discretion to take any
action and to execute any instrument that the Secured Party may deem necessary
or advisable to accomplish the purposes of this Agreement, including, without
limitation, the following:

          (a)  to obtain and adjust insurance required to be paid to the Secured
Party pursuant to Section 6(b);

          (b)  To ask for, demand, collect, sue for, recover, compromise,
receive, and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;

          (c)  to receive, endorse and collect (i) any drafts or other
instruments, documents and chattel paper in connection with Section 9(a) or (b)
and (ii) all instruments

                                     -13-
<PAGE>

made payable to the Debtor representing any interest payment, dividend, return
of principal or other distribution in respect of the Deposit Account Collateral
or any part thereof, and to give full discharge for the same; and

          (d)  to file any claims, take any action or institute any proceedings
that the Secured Party may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of the Secured Party with
respect to any of the Collateral.

     10.  SECURED PARTY MAY PERFORM.  If the Debtor failures to perform any
          -------------------------
agreement contained herein, the Secured Party may itself perform, or cause
performances of, such agreement, and the expenses of the Secured Party incurred
in connection therewith shall be payable by the Debtor.

     11.  SECURED PARTY'S DUTIES.  The powers conferred on the Secured Party
          ----------------------
under this Agreement are solely to protect its interest in the Collateral and
shall not impose any duty upon it to exercise any such powers. Except for the
safe custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Secured Party shall not have any duty as
to any Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Deposit Account Collateral, whether or not the Secured Party has or is deemed to
have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against other parties or any other rights pertaining to any
Collateral. The Secured Party shall be deemed to have exercised reasonable care
in the custody and preservation of any Collateral in its possession if such
Collateral is accorded treatment substantially equal to the treatment that the
Secured Party accords its own property.

                                     -14-
<PAGE>

     12.  RIGHTS OF THE SECURED PARTY PRIOR TO DEFAULT
          --------------------------------------------

          (a)   Notwithstanding any other part of this Agreement, the Secured
Party may enter upon Debtor's premises at any reasonable time and upon
reasonable prior notice and with minimum interference with Debtor's business
operations to inspect Debtor's books and records pertaining to the Collateral or
its proceeds and Debtor shall assist the Secured Party in whatever way
reasonably necessary to make any inspection.

          (b)   The Debtor hereby agrees that upon five (5) business days
written notice from the Secured Party it will do any or all of the following:

                (1)  deliver to the Secured Party lists or copies of all
accounts which are proceeds of Debtor's inventory promptly after they arise;

                (2)  join with the Secured Party at its request in executing
financing statements and pay the cost of filing the same wherever the Secured
Party deems appropriate and will do, make, execute and deliver all such
reasonably additional and further acts, things, deeds, assurance and instruments
as the Secured Party may reasonably require to completely vest in it and assure
to it its rights hereunder in and to the Collateral and will pay all reasonable
out-of-pocket expenses, including, without limitation, the enforcement of any of
the Obligations or the administration, preservation, or protection of or
realization upon the Collateral or any part thereof.

     13.  EVENTS OF DEFAULT
          -----------------

     Each of the following shall be an event of default.

                                     -15-
<PAGE>

     (a)   An Event of Default as defined in the Trade Financing Agreement shall
have occurred and be continuing.

     (b)   Debtor defaults in the due performance or observance of any
obligation of Debtor under this Agreement and fails to cure such default within
30 days after receipt of written notice from Secured Party.

     (c)   Any representation or warranty or guarantee made by Debtor herein or
in any other statement heretofore or hereafter furnished by Debtor to the
Secured Party proves to be false or misleading in any material respect.

     (d)   Debtor becomes insolvent as defined in Section 1(a) above.

     (e)   This Agreement, for any reason except as may be permitted by the
terms hereof, ceases to create a valid and perfected first-priority security
interest in any of the Collateral.

     14.   ADDITIONAL RIGHTS OF SECURED PARTY AFTER DEFAULT
           ------------------------------------------------

     (a)   When Debtor is in default hereunder, all obligations secured hereby
shall become immediately due and payable at Secured Party's option without
notice to Debtor, and Secured Party may in its sole discretion proceed to
enforce payment of the same and exercise any or all of the rights and remedies
afforded to Secured Party by the Uniform Commercial Code or otherwise possessed
by Secured Party.

     (b)   In addition thereto, the Debtor further agrees as follows:

                                     -16-
<PAGE>

          (1)   In the event that notice is necessary under applicable law,
written notice mailed to the Debtor or any accommodation party given seven (7)
business days prior to the date of public sale of any of the Collateral subject
to the security interest created herein or prior to the date after which private
sale or any other disposition of said Collateral will be made shall constitute
reasonable notice, but notice given in any other reasonable manner or at any
other time shall be sufficient.

          (2)   Without precluding any other methods of sale, the sale of
Collateral shall have been made in commercially reasonable manner if conducted
in conformity with reasonable practices for disposing of similar property.

          (3)   The Collateral need not be present at any public or private sale
or in view of the purchaser or purchasers and title shall pass upon such sale
wherever the property or any part thereof is located with like effects as though
all the property were present and in possession of the person conducting the
sale and were physically delivered to the purchaser or purchasers; the Secured
Party may bid for and purchase at any public or private sale the Collateral
offered for sale or any part thereof and by such Secured Party shall become the
owner thereof.

          (4)   The Secured Party may require the Debtor to assemble the
Collateral, taking all necessary or appropriate action to preserve and keep it
in good condition and make such available to the Secured Party at a place and
time convenient to both parties, all at the expense of the Debtor. Furthermore,
in any such event, to the extent permitted under applicable law, full power and
authority are hereby given to the Secured Party to sell, assign and deliver the
whole of the Collateral or any part thereof, at any time at any broker's board,
or at public or private sale, at the option of the Secured Party and no delay on
the Secured Party's part in exercising any power of sale or any other rights or

                                     -17-
<PAGE>

options hereunder, and no notice or demand, which may be given to or made upon
the Debtor by the Secured Party with to or made upon the Debtor by the Secured
Party with respect to any power of sales or other right or option hereunder,
shall constitute a waiver thereof, or limit or impair the Secured Party's right
to take any action or to exercise any power of sale or any other rights
hereunder, without notice or demand, or prejudice the rights of the Secured
Party as against the Debtor in any respect.

     (c)   Without limiting any of foregoing, the Secured Party upon default of
the Debtor, may take possession of the Collateral. In taking possession, the
Secured Party may proceed without judicial process or may proceed by action. The
Debtor, upon two (2) business days written notice from the Secured Party, must
assemble all of the Collateral and make it available to the Secured Party at a
place designated by the Secured Party which is reasonably convenient to the
Secured Party and the Debtor. At the Secured Party's option, the Secured Party
may, without removal from the Debtor's premises determine that any or all of the
Collateral is unusable, and may dispose of the unusable Collateral on the
premises of the Debtor.

     (d)   Debtor will deliver to the Secured Party promptly upon receipt all
proceeds of the Inventory received by the Debtor including, without limitation,
proceeds of accounts referred to above, in the exact form in which they are
received.

     (e)   To evidence the Secured Party's rights hereunder, Debtor will assign
or endorse proceeds of Collateral to the Secured Party.

     (f)   Debtor will notify its account debtors that their accounts have been
assigned to the Secured Party and shall be paid to the Secured Party and
indicate on all invoices to such account debtors that the accounts are payable
to the Secured Party. The Secured Party

                                     -18-
<PAGE>

shall have full power to so notify account debtors, to collect, compromise,
endorse, sell, or otherwise deal with accounts and proceeds thereof in its own
name or that of Debtor at any time. The Secured Party in its sole discretion may
apply cash proceeds to the payment of any liabilities or may release such cash
proceeds to Debtor for use in the operation of Debtor's business.

     15.   DISPOSITION OF PROCEEDS FROM SALE OF DEBTOR'S COLLATERAL AFTER
           --------------------------------------------------------------
DEFAULT BY DEBTOR.
------------------

     (a)   After default, the Secured Party may sell, lease or otherwise dispose
of any or all of the Collateral in its then condition or after preparation or
processing. The proceeds of disposition shall be applied first to the reasonable
expenses of retaking, holding, preparation for sale, selling and the like and
the reasonable attorney's fees and legal expenses incurred by the Secured Party
and second to the satisfaction of all of the indebtedness owed by the Debtor to
the Secured Party and any amount remaining shall be returned to the Debtor.

     (b)   If the proceeds from the sale of the Collateral are not sufficient to
satisfy the indebtedness of the Debtor to the Secured Party, the Secured Party
may proceed against the Debtor for any deficiency.

     16.   RIGHTS OF DEBTOR.
           -----------------

     Until default, Debtor may use its inventory and goods in any lawful manner
not inconsistent with this Agreement and with the terms of insurance thereon;
may sell its inventory and goods in the ordinary course of business; and may use
and consume any raw

                                     -19-
<PAGE>

materials or supplies, the use and consumption of which is necessary in order to
carry on Debtor's business.

     17.   AMENDMENT OF AGREEMENT, WAIVERS, ETC.
           -------------------------------------

           (a)  Debtor reserves the right to request the amendment of this
Agreement to accommodate accounts receivable financing at some time in the
future. Debtor will negotiate new terms with the Secured Party at that time. No
amendment or waiver of any provision of this Agreement or consent to any
departure by the Debtor therefrom shall in any event be effective unless the
same is in writing and signed by the Secured Party, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.

           (b)  The waiver (whether express or implied) by the Secured Party of
any breach of any term or condition of this Agreement shall not prejudice any
remedy of the Secured Party in respect of any continuing or other breach of the
terms and conditions hereof and shall not be construed as a bar to any right or
remedy that the Secured Party would otherwise have on any future occasion under
this Agreement.

           (c)  No failure to exercise or delay in exercising, on the part of
the Secured Party, any right, power or privilege under this Agreement shall
operate as a waiver thereof or the exercise of any other right, power or
privilege.

     18.   Addresses for Notices. All notices and other communications provided
           ---------------------
for hereunder shall be in writing (including, without limitation, communication
by telecopier) and shall be mailed, telecopied, or delivered to the Debtor or
the Secured Party, as the case may be, at the address therefor set forth in the
Trade Financing Agreement or at

                                     -20-
<PAGE>

such other address as may be designated by such party in a written notice to the
other party complying with the terms of this section. All such notices and other
communications shall be effective as provided in the Trade Financing Agreement.

     IN WITNESS HEREOF, the parties hereto have executed this Agreement as of
the date first above written.

DEBTOR:   Centillium Technology Corporation

          BY:  /s/ A. Travis White

          TITLE:    President and Chief Executive Officer

          ADDRESS:  46531 Fremont Boulevard

                    Fremont, California 94538

SECURED PARTY:  Mitsubishi International Corporation

          By:    /s/ Masayoshi Hirano

          TITLE:     General Manager of Palo Alto Office

          ADDRESS:   850 Hansen Way, Suite 100

                     Palo Alto, California 94306

                                     -21-
<PAGE>

                                  Schedule 1

                               Deposit Accounts

---------------------------------------------------------------------------

Silicon Valley Bank
3303 Tasman Drive
Mail Stop NC11
Santa Clara, CA 95054

          Checking Account No.            ___________________
          Payroll Account No.             ___________________
          Money Market Account No.        ___________________

Morgan Stanley & Co., Inc.
[Address]

          Checking Account No.            ___________________
          Payroll Account No.             ___________________
          Money Market Account No.        ___________________

                                     -22-<PAGE>

                                                                 EXHIBIT 10.21

                                      UMC

                               Foundry Agreement

                                    Between

                      United Microelectronics Corporation

                                      And

                        Centillium Communications, Inc.
<PAGE>

                               FOUNDRY AGREEMENT
                               -----------------

This Foundry Agreement (the "Agreement") is entered into this March 7th , 2000
(the "Effective Date") by and between Centillium Communications Inc., a
corporation having its principal place of business at 47211 Lakeview Blvd.,
Fremont, California, 94538 ("Buyer") and UMC Group (USA), a California
corporation having its principal place of business at 488 DeGuigne Drive,
Sunnyvale, California, 94086 ("Seller"), for provision of foundry services to be
performed by United Microelectronics Corporation, an ROC corporation
("Manufacturer").

                                   RECITALS

A.  WHEREAS, Seller is in the business of furnishing integrated circuit
manufacturing services performed by Manufacturer, which shall perform, at
Seller's request, the manufacturing services contracted for with Seller
hereunder;

B.  WHEREAS, Buyer desires to have Seller furnish integrated circuit
manufacturing services for it;

NOW, THEREFORE, in consideration of the following covenants and conditions the
parties agree:

1  DEFINITIONS

1.1  "Products" shall mean the products to be manufactured pursuant to this
      --------
     Agreement as specified in Quotation(s).

1.2  "Quotation(s)" shall mean the quotations attached hereto under Exhibit a
      ------------
     and such further quotations as are agreed upon in a writing signed by Buyer
     and an Officer of Seller. Each such Quotation shall describe the Products
     to be manufactured, prices, fees and charges for the Products, acceptance
     criteria for Products, all aspects of, and services needed for, mask
     making, testing, assembly and packaging, and all other specifications,
     quantities, cycle and lead times and parameters for the Products. Prices
     shall be separately itemized for mask sets, processed wafers, wafer probe,
     assembly and final test.

2  PRODUCTION PROCEDURES

2.1  Product Prototype Approval. No Product prototypes shall be manufactured
     --------------------------
     except pursuant to a Quotation approved in writing by Buyer and an Officer
     of Seller. For each Quotation for a new Product agreed upon by the parties,
     Buyer will deliver a tape in GDS II format or a mask set. If Buyer provides
     its design in the form of a tape, then upon receipt of the tape from Buyer,
     Seller, or its subcontractors, will produce a mask set. In either case,
     Seller will produce one or more pilot wafer runs according to the schedule
     and at the price set forth in the Quotation. Within ninety
<PAGE>

     (90) days after receipt of pilot run wafers for a new Product, Buyer may
     return any claimed non-conforming pilot wafers to Seller with a written
     rejection statement specifying the alleged failure or failures of the pilot
     wafers to meet the Acceptance Criteria set forth in the Quotation. If Buyer
     does not return the pilot wafers with a written rejection statement within
     such ninety (90) day period, then the process and pilot wafers shall be
     deemed to have been approved by Buyer. If any pilot wafer does not meet the
     Acceptance Criteria for reasons attributable to Seller and is rejected by
     Buyer, Seller shall at Seller's expense use commercially reasonable efforts
     to rerun the pilot wafers and resubmit the results in a manner that
     complies with the Acceptance Criteria. If Seller, within ninety (90) days
     after receipt of Buyer's timely written rejection report, is unable to
     supply Buyer with conforming pilot wafers, then either party may by written
     notice to the other terminate this Agreement as to such Product and
     Quotation, and if so terminated, Buyer will not owe Seller any amounts for
     the pilot wafers involved (1) otherwise provided in the Quotation, or (2)
     the noncompliance was attributable to Seller.

2.2  ECNs
     ----

2.2.1  Buyer ECNs. After initial qualification, Buyer shall have the right to
       ----------
     make such changes as it deems appropriate to the design of Products to be
     fabricated for it by Seller, provided however that each such change must be
     timely documented by Buyer through written change notices. Notwithstanding
     anything to the contrary, after process qualification runs for a particular
     design have been made and approved by Seller and Buyer, any Buyer-requested
     changes to design, process or materials for such Products shall be subject
     to Seller's consent (which will not be unreasonably withheld) and payment
     by Buyer of applicable reasonable costs, if any, related to such change.

2.2.2  Seller ECNs. For changes that Seller desires to make, the following
       -----------
     procedure shall apply:

2.2.2.1  Routine Changes. Seller may, with Buyer's prior written approval, which
         ---------------
     may not unreasonably be withheld, make changes in the processes used to
     manufacture Products (i) that do not materially affect physical or
     functional interchangeability or performance; or (ii) when required for
     purposes of safety and/or compliance with applicable law or regulations.

2.2.2.2 Material Changes.
        -----------------

2.2.2.2.1  Seller shall give Buyer advance written notice of any proposed
      change(s) ("Proposed Change Notice") in materials and/or to the
      manufacturing processes qualified for production of Products, which, to
      the best of Seller's knowledge, might affect the form, fit, performance,
      maintainability, operation, function, reliability, interface,
      interconnectability, compatibility, design rules, models, or size of the
      chips for Products then qualified and subject to open purchase orders from
      Buyer.
<PAGE>

2.2.2.2.2  Such Proposed Change Notice shall describe the nature of the proposed
           change(s), including reasons for the change(s), the anticipated
           schedule for implementation of the change(s), and other relevant
           technical and logistic considerations, including without limitation
           quality and reliability data to the extent available.

2.2.2.2.3  Buyer shall approve or disapprove any such proposed change promptly,
           but in no event may any such change be disapproved later than five
           (5) business days after receipt of the Proposed Change Notice.

2.2.2.2.4  If Buyer disapproves such proposed change within the five business
           day period allowed, Seller shall continue to manufacture and deliver
           to Buyer unchanged Products in accordance with the applicable
           Agreements for a minimum of six (6) months from the date Seller
           issues the Proposed Change Notice.

2.2.2.2.5  Upon the expiration of three months after the following Proposed
           Change Notice, Seller, in its discretion and by then giving a minimum
           of three months prior written notice to the Buyer, may stop
           manufacture and delivery of all Products involved without liability.

2.2.3      Quality Assurance. No additional quality assurance requirements or
           -----------------
           measurements (whether cv plots, metal step coverage analysis, SEM
           analysis, or other) will be required except upon Seller's written
           agreement as to the step or measurement to be performed, and Buyer's
           written commitment to pay Seller's stated costs.

2.3  Production Runs, Pilot Runs, Hot Runs, etc. Exhibits a and B set forth the
     ------------------------------------------
     terms applicable to Wafer Cycle Time, Pilot Runs, Hot Lots, Production Runs
     and On Hold.

3  ORDER, DELIVERY, PRICING AND PAYMENT TERMS

3.1  Forecasts
     ---------

3.1.1   During the first seven calendar days of each month, Buyer will provide
        to Seller by facsimile or other electronic communication a written
        rolling forecast of its wafer capacity requirements from Seller's
        facilities for the next twelve full calendar months (each a "Buyer
        Forecast") (provided however that forecasts for the seventh and later
        months are for reference only and not binding on either party).

3.1.1.1  Each such Buyer Forecast shall show the quantity of wafer outs and the
         specific technology and/or process for the wafers listed. Buyer shall
         make good faith efforts to ensure that all such Buyer Forecasts are
         reasonable estimates of its anticipated needs. Subject to this
         obligation, and except as expressly stated in this Section 3.1.1 and/or
         in a written capacity quotation, all such Buyer
<PAGE>

      Forecasts (and any responses to them) will be for planning purposes only,
      and will not create any obligation to purchase and/or sell.

3.1.1.2  Each such Buyer Forecast shall constitute a commitment by the Buyer to
     purchase a minimum of the following percentages of the amounts indicated:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
Month in the forecast      First month     Second month of     Third month   Fourth month   Fifth & sixth
                           of forecast         forecast        of forecast    of forecast       months
---------------------------------------------------------------------------------------------------------
<S>                        <C>           <C>                   <C>           <C>            <C>
Minimum percentage
commitment for                     100%                  100%          100%            75%             50%
amounts forecast for
that month
---------------------------------------------------------------------------------------------------------
</TABLE>

3.1.1.3  Seller will provide a written response to each Buyer forecast within
     two weeks of Seller's receipt. Subject to Section 3.1.2 below and the other
     terms set forth in this Agreement, Seller's response shall accept the
     quantities in the applicable months to the extent they are less than or
     equal to those accepted by Seller for the applicable month(s) pursuant to
     prior written agreement and/or forecasts. Seller's response may accept
     and/or reject in whole or in part any additional forecast quantities for
     those months.

3.1.2  To the extent that any forecast from Buyer pursuant to Section 3.1.1
     above fails to forecast the full capacity or quantity if any, allocated or
     promised to Buyer during any one or more of the first twelve months of such
     forecast: (i) Seller shall be entitled in its sole and complete discretion
     to enter commitments with others for such unexercised capacity for the
     applicable months and in the amounts not so exercised, and (ii) such Buyer
     will not have any right to require Seller to provide that unexercised
     capacity to that Buyer in the month(s) involved.

3.2  Orders And Production Release. No order for production quantities of a
     -----------------------------
     Product shall be placed by Buyer unless and until Buyer has approved the
     pilot runs or prototypes for the Product. If Buyer properly places an order
     for production quantities of a Product, Seller may deem such an order as
     written production release approval for such Product. All orders for
     Products shall be in writing. Seller shall acknowledge in writing, within
     three (3) business days of receipt of an order, either the acceptance of
     the order, or the reason such order cannot be accepted, or if Seller wishes
     to modify such order. If Seller does not provide such acknowledgement
     within the time provided, Buyer shall contact Seller to determine the cause
     for the lack of acknowledgment. No acceptance of a purchase order shall
     constitute acceptance of any terms at variance with this Agreement and/or
     previously agreed forecasts, and purchase orders shall be null and void as
     to those variances.

3.3  Cancellation and Modifications to Orders.
     -----------------------------------------

3.3.1  Cancellations and Modifications. Unless wafer processing has started, or
       -------------------------------
     Seller has incurred engineering or tooling charges, Buyer may cancel or
     modify a
<PAGE>

     purchase order without penalty by delivering to Seller a written notice of
     cancellation or modification within three (3) days of Seller's receipt of
     the original purchase order involved; provided however that no such
     cancellation will relieve Buyer of any obligations under any other
     applicable provisions or agreements including without limitation any
     obligation to comply with loading commitments, forecasts and/or purchase
     orders.

3.3.2  Cancellation Charges. In addition to, and without waiving any other
       --------------------
     remedies, the minimum charges for order cancellation shall be the contract
     price multiplied by the proportion of the relative mask step at which the
     wafer(s) were at the time of cancellation, plus all costs of starting wafer
     materials and mask sets.

3.3.3  Partially Completed Products. In no event will Buyer have rights in
       ----------------------------
     partially completed Products.

3.4  Delivery.
     --------

3.4.1  Delivery will be made FCA (Incoterms 2000), Manufacturer's plant, Science
     Based Industrial Park, HsinChu City, Taiwan, to a carrier designated in
     writing by Buyer or, if Buyer fails to designate a carrier, to a carrier
     designated by Seller.

3.4.2  Title to the Products will pass to Buyer upon delivery to carrier.

3.4.3  All shipping and delivery dates are subject to timely receipt of fully-
     approved mask sets and fully-completed purchase orders in the HsinChu
     office of Manufacturer's fab where the wafers are to be processed.

3.4.4  Seller shall make reasonable efforts to achieve on-time delivery and
     linear shipments. Subject to this and Seller's written commitments for
     wafer starts, SELLER SHALL NOT BE LIABLE FOR ANY DELAYS OR FAILURES TO MEET
     DATES.

3.4.5  In the event of any delays and/or any breach of any written warranty,
     Buyer may give prompt written notice to Seller, adjusting forecasted and/or
     ordered amounts, and/or canceling orders for affected Products, to the
     extent necessary as a result of any impact of such delay on Buyer's need
     for such Products.

3.5 Pricing.
-----------

3.5.1  Refer to Exhibit A.02 for Pricing. Exhibit A.02 shall be reviewed on a
     yearly basis and pricing may be revised if needed. Such review shall be
     done during the last quarter of each year to set prices for the following
     year.

3.5.2  Any tax or related charge which Seller shall be required to pay to or
     collect for any government upon or with respect to services rendered or the
     sale, use or delivery of the Product or other materials (except for taxes
     based on Seller's
<PAGE>

     income) shall be billed to the Buyer as a separate item and paid by Buyer,
     unless a valid exemption certificate is furnished by Buyer to Seller.

3.6  Payment
     -------

3.6.1  Unless otherwise agreed or stated in Seller's quotation, full payment
     shall be made in New Taiwan Dollars or U.S. Dollars (as stated in the
     applicable Quotation or as otherwise agreed in writing) within 30 days of
     delivery.

3.6.2  Seller reserves the right to change credit terms at any time in its
     reasonable discretion.

3.6.3  Buyer will issue written purchase orders at least four weeks, plus the
     agreed cycle time, prior to requested wafer out day.

3.6.4  Regardless of anything to the contrary, Buyer understands that Seller
     generally needs to start more than the numbers of wafers ordered by Buyer
     in order to guarantee the quantities of wafers so ordered which will yield
     within the agreed specifications. Accordingly, Buyer will accept quantity
     variations (and pay according to the agreed pricing) up to as much as ten
     percent (10%) above the quantities stated in Buyer's purchase order(s).

4  RELIABILITY & QUALITY

4.1  Quality Data. Seller will provide, upon Buyer's written request during the
     ------------
     term of their foundry relationship, Seller's available reliability and
     quality data regarding Products produced for Buyer for the purpose of
     maintaining consistent quality and reliability standards for such Products.

4.2  Traceability. During the term of the foundry relationship, Seller shall
     ------------
     maintain fab and test lot traceability for Products manufactured on behalf
     of Buyer.

4.3  Notification of Defects. Seller will promptly after discovery advise Buyer
     -----------------------
     of defects and/or non-conformity in Products already shipped to and/or in
     lots currently in manufacture for Buyer.

4.4  Acceptance Criteria. Wafer acceptance will be subject to process control
     -------------------
     monitor acceptance criteria to be mutually agreed upon on a process-by-
     process basis. Once approved, no such wafer acceptance criteria shall be
     binding until in a writing signed by an Officer of Seller which clearly and
     specifically identifies the Products (by mask or product number) and
     processes (by Seller's process designation) involved. All accept/reject
     criteria shall be stated in the agreed upon wafer acceptance and visual
     inspection specifications and all critical dimension and process tolerances
     shall be solely as agreed upon in writing.
<PAGE>

4.5  Stop Shipments.
     --------------

4.5.1  Subject to Buyer's obligations with respect to volumes committed under
     the ordering and forecasting procedures involved, upon receipt of Buyer's
     written Stop Request, Seller will immediately stop shipment of Products
     which are subject to a suspected failure to meet the criteria specified in
     the wafer acceptance criteria agreed upon in writing between Buyer and
     Seller. If Seller is responsible for such failure, and Seller is not able
     to correct the matter within sixty (60) days of receipt of such Stop
     Notice, then (i) Buyer may reject non-conforming Products, and, (ii) Buyer
     may, without penalty (including loss of capacity), cancel any then-pending
     purchase order(s) for such Products as to which Wafers have not been
     started by sending written notice of cancellation to Seller within seventy-
     five (75) days of the written Stop Request. Such a notice of cancellation
     shall be effective on receipt by Seller.

4.5.2  If Buyer requests Seller to stop shipment of any Products which Buyer is
     obligated to purchase, and the Products are determined in good faith by
     Seller to have been processed in accordance with the applicable written
     requirements, in addition to and without waiving any other remedies, Buyer
     shall pay Seller in full for completed Products and, in addition, for
     Seller's reasonable costs for work in progress. Under this Section 4.5
     payment for completed Products will be at the purchase order price, and
     payment for work in progress shall be based on Buyer's actual costs for raw
     materials and the relative mask step reached when work is stopped.

4.6  Failure Analysis. Upon written request from Buyer and subject to
     ----------------
     satisfactory arrangements for payment to Seller for the reasonable costs
     involved, Seller will perform failure analysis of Products returned to
     Seller pursuant to Seller's standard Return Policy and Procedures. If such
     analysis shows the existence of material defects in breach of applicable
     Seller warranties, Seller will not be entitled to payment for the cost of
     Seller's failure analysis concerning such defects for the specific Products
     which were subject to them.

4.7  Return Material Authorization (RMA). Buyer will not make any returns to
     -----------------------------------
     Seller without first obtaining a written Return Material Authorization
     (RMA). Buyer agrees to pay Seller the full purchase price and all costs and
     charges incurred by Seller in connection with any returned wafers or
     Products which Seller determines were within Seller's specifications at the
     time of initial delivery to the carrier or at the time of return to Seller.
     Generally, Seller will analyze authorized returns within four (4) working
     weeks of receipt by Seller, and promptly thereafter report on the results.
     Buyer agrees to cooperate in good faith with Seller to resolve any problems
     that may arise and to promptly send Seller the results of all tests and
     analyses concerning Products.

5  WARRANTY
<PAGE>

5.1  Limited Warranty. Seller warrants Products delivered after initial
     ----------------
     qualification shall be processed (i) using the masks (or duplicates of
     them) which were used for qualification, (ii) within the tolerances stated
     in Seller's applicable process specifications, and (iii) in compliance with
     applicable Wafer Acceptance and/or Yield Criteria agreed to in a writing
     signed by Seller and Buyer.

5.2  Exclusions.
     ----------

5.2.1  Products which have been subject to abuse, misuse, accident, alteration,
     neglect, conditions outside specification, unauthorized repair or improper
     application are not covered by any warranty.

5.2.2  Seller shall not be responsible for defects or claims caused by acts not
     performed by Seller; or by design or application; or by combination of
     Products with other things.

5.2.3  Products are not intended for use in, and no warranty is made with
     respect to, applications where failure to perform can reasonably be
     expected to result in significant injury (including, without limitation,
     navigation, weaponry, aviation or nuclear equipment, or for surgical
     implant or to support or sustain life) and Buyer will indemnify, defend,
     and hold harmless Seller from all claims, damages and liabilities arising
     out of any such matters.

5.3  Remedy. To the extent that any Products fail to meet the applicable
     ------
     warranties and/or requirements due to reasons for which Seller is
     responsible, Seller shall either (i) replace such Products without charge,
     or (ii) refund the payments made to Seller for such Products, all within
     sixty (60) calendar days of Seller's receipt of written notice from Buyer
     of such non-conformity. The parties will discuss in good faith which of
     these two remedies is the most appropriate; provided however that if they
     cannot agree, Seller may choose in its sole discretion between the two
     remedies, and provided further that all Products for which refund and/or
     replacement is sought and all returns shall be handled pursuant to Seller's
     Return Policy and Procedures.

5.4  Sole Warranty. This Section 5 is the only warranty by or on behalf of
     -------------
     Seller and may not be modified or amended except in writing signed by an
     authorized officer of Seller and by Buyer. Buyer is not relying upon any
     warranty or representation except for those specifically stated here or in
     such a signed writing. With respect to obligations of Seller under this
     Agreement which would logically be undertaken and/or performed by
     Manufacturer, Seller guarantees Manufacturer's performance thereof.

5.5  No Reliance. Buyer is not relying on any statements or information in
     -----------
     Seller's literature, and Buyer will test all parts and applications under
     extended field and laboratory conditions as appropriate. Notwithstanding
     any cross-reference or statements of compatibility, functionality,
     interchangeability, and the like, Seller
<PAGE>

     made goods, embedded devices and processes may differ from similar goods,
     devices and processes from other vendors in performance, function or
     operation, or as to matters, ranges and conditions not stated in and/or
     outside Seller's written specifications; and Buyer agrees that Seller makes
     no warranties and is not responsible for such things. All reusable IP,
     including that listed in Seller's Intellectual Property Catalog, and
     including but not limited to blocks, libraries, tools, and documentation
     therefor, is licensed to Buyer by the individual IP vendors and not by
     Seller, and in any event Seller makes no warranty in connection with such
     IP. Buyer is not relying on any statements or information provided by
     Seller in connection with such IP, and Buyer will fully verify all IP as
     appropriate and be responsible to ensure that such IP is compatible and
     suitable for Buyer's intended purpose and applications.

5.6  Disclaimer. EXCEPT AS PROVIDED ABOVE, SELLER MAKES NO WARRANTIES OR
     ----------
     CONDITIONS, EXPRESS, IMPLIED, OR STATUTORY, AND EXPRESSLY EXCLUDES AND
     DISCLAIMS ANY WARRANTY OR CONDITION OF MERCHANTABILITY, NONINFRINGEMENT, OR
     FITNESS FOR a PARTICULAR PURPOSE OR APPLICATION.

5.7  Limitation. REGARDLESS OF CAUSE OR REASON FOR DAMAGE (WHETHER ACCIDENT,
     ----------
     NEGLIGENCE, OR OTHERWISE) SELLER SHALL HAVE NO LIABILITY (DIRECT,
     CONSEQUENTIAL OR OTHER) FOR, IN CONNECTION WITH OR ARISING FROM PROPERTY
     FURNISHED FOR USE AT OR LEFT AT SELLER; and by delivering or entrusting
     property to Seller, Buyer expressly confirms this limitation.
     Notwithstanding this limitation, Seller will replace, or pay the reasonable
     retooling costs to replace, masks damaged or destroyed as a result of
     Seller's negligence or fault. Upon written request sent to the billing
     address listed on Buyer's latest-dated purchase order, Buyer will promptly
     take possession of any and all property of Buyer, and should Buyer fail to
     do so within thirty days of such request, Seller may destroy or reclaim
     such property without liability.

6  LIMITATION OF LIABILITY

6.1  Force Majeure. Neither party will be liable for any loss, damage or claim
     -------------
     resulting from causes beyond its reasonable control, including but not
     limited to, war, fire, delay caused by others, material shortage, force
     majeure, or labor conditions; and in the event of such a condition(s), the
     date(s) for Seller's performance will be extended for a period equal to any
     resulting delay.

6.2  Limitation of Liability.
     ------------------------

6.2.1  SELLER'S LIABILITY ARISING OUT OF ANY QUOTATION, ANY AGREEMENT, ANY
     BREACH THEREOF, OR ANY PRODUCTS OR SERVICES WILL BE LIMITED TO REFUND OF
     THE PURCHASE PRICE
<PAGE>

     OR REPLACEMENT OF PURCHASED PRODUCTS (RETURNED TO SELLER FREIGHT PREPAID);
     OR 1N THE EVENT OF a FAILURE OR BREACH BY SELLER REGARDING DELIVERY, AN
     AMOUNT EQUAL TO THE TOTAL PURCHASE PRICE OF THE PRODUCTS THAT HAVE NOT BEEN
     DELIVERED DUE TO SUCH FAILURE. ALL CLAIMS WILL BE SUBJECT TO THE TIME
     LIMITATIONS STATED IN SELLER'S RETURN POLICY AND PROCEDURE.

6.2.2  AS a SEPARATE LIMITATION, IN NO EVENT WILL SELLER BE LIABLE (i) FOR COSTS
     OF SUBSTITUTE PRODUCTS, (ii) FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR
     INDIRECT DAMAGES, OR (iii) FOR LOSS OF USE, OPPORTUNITY, MARKET POTENTIAL,
     GOODWILL AND/OR PROFIT ON ANY THEORY (CONTRACT, TORT, FROM THIRD PARTY
     CLAIMS OR OTHERWISE). THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY
     FAILURE OF ESSENTIAL PURPOSE OR OF ANY FAILURE OR INADEQUACY OF ANY REMEDY.
     THIS AGREEMENT STATES THE ONLY AND EXCLUSIVE REMEDY FOR ANY AND ALL CLAIMS
     MADE AGAINST SELLER UNDER ANY AGREEMENT AND/OR WITH RESPECT TO WAFERS,
     SERVICES AND/OR PRODUCTS.

6.3  Commencement of Actions or Proceedings. No action or proceeding (except for
     --------------------------------------
     payment for delivered Products) may be commenced by either party against
     the other, whether for breach, indemnification, contribution or otherwise,
     more than one year after delivery of the Products to the carrier; and no
     claim may be brought unless the non-claiming party has first been given
     commercially reasonable notice, a full written explanation of all pertinent
     details (including copies of all materials), and a good faith opportunity
     to resolve the matter.

6.4  BUYER EXPRESSLY AGREES TO THE LIMITATIONS OF SECTIONS 5, 6, 7 AND 8 AND TO
     THEIR REASONABLENESS.

7  INDEMNIFICATION & COOPERATION

7.1  Indemnification by Seller. Seller will defend and/or settle all suits
     -------------------------
     against Buyer to the extent based on any claim that any processes (as
     performed by Seller with respect to Products) infringe any R.O.C.,
     Canadian, Japanese, European Community and/or U.S. patent, copyright, trade
     secret or trademark; provided, however, that Buyer (i) gives immediate
     written notice to Seller, (ii) permits Seller to defend, and (iii) gives
     Seller all needed information, assistance, and authority.

7.2  Exclusions. Seller will not be responsible for infringements resulting from
     ----------
     anything not manufactured entirely by Seller. or from any combination with
     things or materials not furnished by Seller, or for any claim due in whole
     or in part to any act, omission, design and/or specification of Buyer.
<PAGE>

7.3  THIS ARTICLE 7 STATES SELLER'S ENTIRE LIABILITY AND OBLIGATION WITH RESPECT
     TO INTELLECTUAL PROPERTY INFRINGEMENT OR CLAIMS THEREFOR AND IS EXPRESSLY
     SUBJECT TO ARTICLE 6. Except as to claims Seller is obligated to defend
     and/or resulting from Seller's wrongdoing and/or negligence, BUYER WILL
     INDEMNIFY, DEFEND AND HOLD HARMLESS SELLER FROM ALL CLAIMS, COSTS, LOSSES,
     AND DAMAGES (INCLUDING REASONABLE ATTORNEYS' FEES) AGAINST AND/OR ARISING
     OUT OF PRODUCTS AND/OR SERVICES.

7.4  Buyer Guarantee and Indemnity. Without limiting any other terms, Buyer
     -----------------------------
     guarantees that production of Products pursuant to Buyer's specifications
     and/or designs will not infringe, misappropriate or violate any applicable
     R.O.C., Canadian, Japanese, European Community and/or U.S. copyright,
     trademark, patent, trade secret, mask work, or other rights of third
     parties. In the event Buyer becomes party to any infringement or
     misappropriation action or dispute with respect to Products, (i) Seller
     may, at its sole option, immediately terminate and/or suspend performance,
     and (ii) Buyer shall be fully and solely responsible, and will defend,
     indemnify and hold Seller harmless from any and all damages, losses and
     costs (including Seller's reasonable attorneys fees) resulting from any
     claimed breach of Buyer's guarantee.

7.5  Cooperation. Seller and Buyer will cooperate in connection with any issue
     -----------
     raised with respect to intellectual property rights of third parties
     relating to goods and/or to services under this Agreement. Without limiting
     the foregoing, upon written notice to the other, any Party may suspend (i)
     performance of its obligations, (ii) exercise of its rights of first
     refusal with respect to capacity and/or (iii) providing capacity to the
     extent that such Party has reasonable concerns that its future performance
     in connection with such matters will subject it to claims by others with
     respect to such matters, provided however that no such suspension will
     affect any obligation to pay for Products delivered and/or manufactured in
     whole or in part prior to the date of written notice concerning such
     matters. In the event that Seller exercises any of its rights pursuant to
     this Section 7, Seller will negotiate in good faith to minimize the
     liability of Buyer to others.

8  CONFIDENTIALITY

8.1  NDA. The terms of the Reciprocal Non-Disclosure Agreement, attached hereto
     ---
     as Exhibit C, are expressly incorporated herein.

8.2  Buyer's Masks and Databases. Seller will treat any and all masks and design
     ---------------------------
     databases provided by Buyer as confidential, whether or not they are marked
     as required by Exhibit C.
<PAGE>

8.3  Process Technology. Regardless of anything to the contrary., all processes,
     ------------------
     recipes, and manufacturing, fabrication, assembly and test techniques, and
     related improvements ("process technology") provided and/or developed by or
     on behalf of Seller shall be wholly owned by and the property of Seller,
     and Seller shall not be limited or restricted by this Agreement with
     respect to any process technology unless clearly stated to the contrary in
     a writing signed by an officer of Seller identifying the specific
     information in precise detail.

9  TERMINATION & RELATIONSHIPS

9.1  Term. The term of this Agreement as related to any specific Product covered
     ----
     by this Agreement shall be five (5) years from the date of the Quotation
     for that Product, and shall thereafter be automatically extended for
     additional one (1) year terms, unless and until a party to this Agreement
     gives no less than one (1) year's notice that the term should not be
     further extended for that Product. If Seller gives Buyer notice that the
     terms for a Product will not be extended, then during the one (1). year
     notice period Seller shall continue to accept and fill all orders placed by
     Buyer for commercially reasonable quantities calling for delivery within
     lead time of that Product.

9.2  Termination For Insolvency or Bankruptcy. Subject to Section 9.4 below,
     ----------------------------------------
     Buyer and/or Seller (collectively "the Parties") shall have the right to
     terminate the rights of the other Party under their applicable Agreements
     (and any other agreement concerning Products) by giving written notice of
     termination to that other Party at any time upon or after:

9.2.1  the filing by the other Party of a petition in bankruptcy or insolvency;

9.2.2  any adjudication that the other Party is bankrupt or insolvent;

9.2.3  the filing by the other Party of any petition or answer seeking
     reorganization, readjustment or arrangement of its business under any law
     relating to bankruptcy or insolvency;

9.2.4  the appointment of a receiver for all or substantially all of the
     property of the other Party;

9.2.5  the making by the other Party of any assignment for the benefit of
     creditors; or,

9.2.6  the institution of any proceeding for the liquidation or winding up of
     the other Party's business or for the termination of its corporate charter.

Notwithstanding anything to the contrary, no termination under Section 9.2 as to
such other Party shall affect the rights of the Party giving the notice of
termination with respect to Products delivered and/or as to which production had
begun prior to the effective date of termination. Termination pursuant to this
Section 9.2 shall be effective
<PAGE>

immediately upon personal delivery, of the written notice, or in the case of
airmail notice, five days after dispatch.

9.3  Termination for Breach.
     -----------------------

9.3.1  Termination Events. If any party fails to perform or violates any
       ------------------
     material obligation under the applicable Agreements, effective upon thirty
     (30) days' written notice to the breaching party specifying such default
     (the "Default Notice"), the non-breaching party, may terminate the
     applicable Agreement (and all related agreements concerning Products) as to
     its responsibilities and obligations, without liability (subject to
     Sections 9.4 and 9.5 below), unless:

9.3.1.1  The breach specified in the Default Notice has been cured within the
     thirty (30) day period, or if the breach is disputed, the amount in dispute
     is placed in a reasonably secure third party escrow account pending
     resolution of the dispute;
     or

9.3.1.2  The default reasonably requires more than (30) days to correct
     (specifically excluding any failure to pay money), and the defaulting party
     has begun substantial corrective action to remedy the default within such
     thirty (30) day period and diligently pursues such action, in which event,
     termination shall not be effective unless sixty (60) days has expired from
     the date of the defaulting party's receipt of the Default Notice without
     such corrective action being completed and the default remedied.

9.4  Effect of Termination.
     ----------------------

9.4.1  Termination by Buyer. If Buyer terminates the applicable Agreements for
       --------------------
     any reasons stated in Sections 9.2 and/or 9.3 above, Seller will, if so
     requested in writing by Buyer: (i) cease all production required by Buyer's
     then outstanding purchase orders under the Agreements; and (ii) otherwise
     complete and deliver all Products pursuant to Buyer's then outstanding and
     accepted purchase orders and invoice Buyer for the Products.

9.4.2  Termination by Seller. If Seller terminates this Agreement as to Buyer
       ---------------------
     pursuant to Sections 9.2 and/or 9.3 above, in addition to and without
     waiving any other remedy, Seller shall be entitled to payment in full upon
     delivery of all completed Products manufactured on behalf of Buyer, as well
     as to reimbursement for all reasonable direct costs incurred for up to one
     month's work then in progress for Buyer.

9.5  Survival.
     ---------

9.5.1  All obligations to pay monies which accrue prior to termination and/or
     expiration, and the provisions of the Reciprocal Non Disclosure Agreement
     attached as Exhibit C, as well as all other obligations of confidentiality,
     all limitations on
<PAGE>

     warranties and remedies, all obligations with respect to indemnification
     and cooperation, contribution, dispute resolution, and termination shall
     survive the expiration and/or termination of the applicable Agreements
     and/or of any purchase order or understanding concerning Products.

9.5.2  The exclusions and limitations of Sections 5, 6 and 7 will survive the
     termination of the applicable Agreements, and shall apply notwithstanding
     any claim of a failure of any one or more remedies to accomplish their
     purpose. THE PARTIES EXPRESSLY WAIVE AND RELINQUISH ANY CONTRARY RIGHTS
     UNDER ANY AGREEMENT, AND/OR LAW, DECISION, CUSTOM OR PRACTICE.

10  DISPUTE RESOLUTION

10.1  Management Resolution. Within thirty days of a written demand to meet to
      ---------------------
     resolve such one or more disputes arising out of and/or relating to any
     Agreement and/or Products, senior management with the authority to
     negotiate and resolve the issues shall meet in Taiwan or in some other
     mutually agreeable location to discuss the issues, and, from time to time
     during the forty-five day period following such demand (or longer if
     agreeable to the Parties), such management will negotiate and attempt to
     resolve the issues as reasonably requested by any party involved.

10.2  Arbitration.
      -----------

10.2.1  Any such disputes relating to and/or arising out of any Agreement and/or
     Products which cannot be so resolved will be decided exclusively by binding
     arbitration under procedures which ensure efficient and speedy resolution.
     Such an arbitration may be commenced by Seller and/or Buyer (i) after the
     expiration of the forty-five day period following the written demand to
     meet to resolve the dispute pursuant to Section 10.1 above, and/or (ii) at
     such earlier time as any Party involved repudiates and/or refuses to
     continue with its obligations to negotiate in good faith.

10.2.2  The arbitration hearing will be before a panel of three neutral,
     independent arbitrators. The arbitration hearing will be conducted in Santa
     Clara, California (U.S.A).

10.2.3  The arbitration will be conducted under the International Rules of the
     American Arbitration Association. Notwithstanding anything to the contrary:

10.2.3.1  the arbitrators will have no power to order discovery;

10.2.3.2  the arbitrators will follow such procedures and enter such orders and
       conduct the hearing under conditions which ensure at least the same
       degree of confidentiality for each party as provided by Seller's Standard
       Non-Disclosure Agreement, and which adequately protect the participants
       from disclosure of
<PAGE>

       highly sensitive information to anyone other than the arbitrators and
       lawyers (or comparable legal representatives) and reasonably necessary
       expert witnesses and not to persons employed by one or more of the
       parties nor to competitors of them, and

10.2.3.3  the arbitrators shall require pre-hearing exchange of documentary
       evidence to be relied upon by each of the respective parties in their
       respective cases in chief, and pre-hearing exchange of briefs, witness
       lists and summaries of expected testimony.

10.2.4  The arbitrators will make their decision in writing; and their decision
     will be binding upon the Parties and it may be entered by any court having
     jurisdiction.

10.3  Injunctive Relief. Notwithstanding anything to the contrary, any party may
      -----------------
     apply to any court of competent jurisdiction for interim injunctive relief
     with respect to irreparable harm which cannot be avoided and/or compensated
     by such arbitration proceedings, without breach of this Section 10 and
     without any abridgment of the powers of the arbitrators.

10.4  Governing Law. This Agreement and all foundry arrangements involving
      -------------
     Seller and all performance and disputes arising out of and/or relating to
     such matters and/or any Products involved will be governed by the laws of
     California and the United States of America, without reference to conflicts
     of laws principles, and/or any contrary provision, including without
     limitation, the U.N. Convention on Contracts for the International Sale of
     Goods.

11  GENERAL

11.1  Non-Exclusive Relationship. Except as stated in a separate written
      --------------------------
     agreement signed by duly authorized officers of Seller and of Buyer,
     nothing in the Agreements shall prohibit Buyer from purchasing goods and/or
     foundry services from other suppliers, nor prohibit Seller from offering
     wafers and/or foundry services to others or from offering products or
     services on its own behalf.

11.2  No Agency or Partnership. Nothing in the Agreements shall be deemed to
      ------------------------
     create a general or limited partnership or an agency relationship between
     Buyer and/or Seller, and Buyer and Seller are independent companies. Buyers
     will purchase products manufactured from Seller in an arm's length vendor-
     purchaser relationship. No party shall be entitled to act on behalf of
     and/or to bind any one or more of the others.

11.3  Compliance with Law. The parties will comply with all applicable
      -------------------
     restrictions and requirements of applicable law, including without
     limitation those relating to labor, employment, environment, and export
     control. Buyer agrees at its sole expense to comply with all applicable
     laws in connection with the purchase, use or sale of the Products.
<PAGE>

11.4  No Implied Licenses. Nothing contained in this Agreement is intended to or
      -------------------
     shall be construed as:

11.4.1  conferring any right to the other Party to use in advertising,
     publicity, or otherwise, any trademark, trade name or names of any Party,
     or any contraction, abbreviation or simulation thereof; and/or

11.4.2  conferring by implication, estoppel or otherwise, upon any Party any
     license or other right under any class or type of copyright, maskwork,
     trademark, trade name, patent, utility, model or design patent except the
     licenses and rights expressly granted under a written agreement signed by
     the Parties.

11.5  Entire Agreement. This Agreement (including the attached exhibits)
      ----------------
     contains all material and essential terms of a binding agreement between
     the parties with respect to with respect to foundry., fabrication,
     semiconductors, design support and goods, there are no other agreements
     concerning such subject matter. This Agreement is the entire agreement
     between the parties with respect to the stated subject matter; it
     supersedes all prior understandings and agreements with respect to these
     matters, and there are no prior representations, warranties or other
     agreements relating thereto. This Agreement may not be modified, except in
     writing signed by duly authorized officer of each party, and no addition,
     deletion or modification shall be binding on Seller unless expressly agreed
     to in a writing signed by an officer of Seller.

11.6  Notices. All notices, payments, reports and other communications required
      -------
     or permitted hereunder shall be in writing and shall be mailed by first
     class, registered or certified mail, postage prepaid, or otherwise
     delivered by hand, by messenger (including express mail courier services)
     or by facsimile, addressed to the addresses first set forth above or at
     such other address furnished with a notice in manner set forth herein. Such
     notices shall be deemed to have been served when delivered or, if delivery
     is not accomplished by reason of some fault of the addressee, when
     tendered. Notices shall be addressed as follows:

If to Seller:  UMC Group (USA)  Copy to:  Law+
         488 DeGuigne Drive  993 Highlands Circle
         Sunnyvale, CA 94086  Los Altos, CA 94024
         Attn: President  Attn: Peter Courture, Esq.
                                    Fax (650) 968-8885

If to Buyer:  Centillium Communications Inc.
         47211 Lakeview Boulevard
         Fremont, CA 94538
         Attn: Vice President of Operations
<PAGE>

11.7  Assignment. Neither this Agreement nor any of the rights and obligations
      ----------
     created hereunder may be assigned, transferred, pledged, or otherwise
     encumbered or disposed of, in whole or in part, whether voluntarily or by
     operation of law or otherwise, by any party, without the prior written
     consent of the other party. This Agreement shall inure to the benefit of
     and be binding upon the parties' permitted successors and assigns.

11.8  Captions and Section Headings. The captions and section and paragraph
      -----------------------------
     headings used in this Agreement are inserted for convenience only and shall
     not affect the meaning or interpretation of this Agreement.

11.9  Partial Invalidity. If any paragraph, provision, or clause thereof in this
      ------------------
     Agreement shall be found or be held to be invalid or unenforceable in any
     jurisdiction in which this Agreement is being performed, the remainder of
     this Agreement shall be valid and enforceable and the parties shall
     negotiate, in good faith, a substitute, valid and enforceable provision
     that most nearly reflects the parties' intent in entering into this
     Agreement.

11.10  Presumptions. In construing the terms of this Agreement, no presumption
       ------------
     shall operate in either party's favor as a result of its counsel's role in
     drafting the terms or provisions hereof.

11.11  Language. The English language shall govern the meaning and
       --------
     interpretation of this Agreement.

11.12  Waiver. The failure of either party to enforce at any time the provisions
       ------
     of this Agreement, or the failure to require at any time performance by the
     other party of any of the provisions of this Agreement, shall in no way be
     construed to be a present or future waiver of such provisions, nor in any
     way affect the right of either party to enforce each and every such
     provision thereafter. The express waiver by either party of any provision,
     condition or requirement of this Agreement shall not constitute a waiver of
     any future obligation to comply with such provision, condition or
     requirement.

11.13  Cumulative Remedies. The remedies under this Agreement shall be
       -------------------
     cumulative and not alternative and the election of one remedy for a breach
     shall not preclude pursuit of other remedies unless as expressly provided
     in this Agreement.

11.14  Confidentiality of Agreement. Each party agrees that the terms and
       ----------------------------
     conditions of this Agreement and Quotations shall be treated as
     confidential information of both parties, and that neither party will
     disclose the terms or conditions to any third party without the prior
     written consent of the other party, provided, however, that each party may
     disclose the terms and conditions of this Agreement, to the extent
     necessary:

11.14.1  as required by any court or other governmental body;
<PAGE>

11.14.2  as otherwise required by law;

11.14.3  to legal counsel of the parties, accountants, and other professional
      advisors;

11.14.4  in confidence, to banks, investors and other financing sources and
      their advisors;

11.14.5  in connection with the enforcement of this Agreement or rights under
      this Agreement; or

11.14.6  in confidence, in connection with an actual or prospective merger or
      acquisition or similar transaction.

11.15  Authority. Each party represents that all corporate action necessary for
       ---------
     the authorization, execution and delivery of this Agreement by such party
     and the performance of its obligations hereunder has been taken.

11.16  Counterparts. This Agreement may be executed in two (2) or more
       ------------
     counterparts, all of which, taken together, shall be regarded as one and
     the same instrument.

     IN WITNESS WHEREOF, the parties have authorized their undersigned
representatives to sign this Agreement and to bind them to its terms and
conditions in accordance with the foregoing.

Buyer:    Seller:

/s/ William F. Mackenzie          /s/ Jim Kupec
------------------------          -------------
Authorized Signature  Authorized Signature

William F. Mackenzie              Jim Kupec
--------------------              ---------
Printed Name                    Printed Name

Vice President, Operations        President, Worldwide Marketing/Sales
--------------------------        ------------------------------------
Title                                                        Title

March 8, 2000                     March 7, 2000
-------------                     -------------
Date                                                         Date
<PAGE>

                                   EXHIBIT A
                                   ---------
                                   Quotation
                                   ---------

Exhibit A.01 - Initial Process (es)

UMC STANDARD "0.35 um CMOS double-layer poly and triple-layer metal (2P3M)
process on 8-inch non-epi wafers".

Exhibit A.02 - Price Quote

William F. Mackenzie  ref.:CC030200
Vice President of Operations  3/6/00(revised)
Centillium Communications

Process Technology
0.35 um CMOS double-layer poly and triple-layer metal (2P3M) process on 8-inch
non-epi wafers

Mask Tooling
A mask set for design using the above technology will be provided at a NRE
charge of $37,900. Mask charge per layer shall be as follows:
<TABLE>
<CAPTION>

Layer         Price
-----------  -------
<S>          <C>

Diffusion    $ 3,000
N-Well       $ 1,600
P-Well       $ 1,600
Poly 0       $ 3,000
HR           $ 1,600
Poly 1       $ 3,000
N+           $ 1,600
P+           $ 1,600
SAB          $ 1,600
Contact      $ 3,000
Metal 1      $ 3,000
Via 1        $ 3,000
Metal 2      $ 3,000
Via 2        $ 3,000
Metal 3      $ 3,000
Pad          $ 1,300

Total        $37,900
</TABLE>
<PAGE>

Proto Lot

A proto lot, processed with HOT LOT status, consists of a minimum of 6 wafers
and without process split conditions, will be provided at a NRE charge of
$25,000 per lot. UMC guarantees that wafers from this prototype lot meet our
outgoing PCM specifications.

Corner Lot

An engineering comer lot with a maximum of 14 wafers, processed with QTAP
status, will be provided at a NRE charge of $25,000 per tot. UMC guarantees that
nominal wafers from this lot meet our outgoing PCM specifications.

Wafer Price
Monthly run-rate   *  500 wafers: $1,400 per wafer
Monthly run-rate   ** 500 wafers: $1,380 per wafer

Notes:
1.   NRE charges for the proto and comer lots are applicable only for the first
     tape-out of a new technology.
2.   The Super Hot Lot charge is $5,000 per lot for the above mentioned process
     technology.
3.   Wafers shall meet UMC standard PCM data.

Exhibit A.03 - Fabrication Cycle Times

Prototype:    20 days Cycle Time from mask generation to wafer out.

              11 days from Metal 1 to wafer out.

Production:  38 days to wafer out after P.O. acceptance.

Exhibit A.04 - CAPACITY
               --------

<TABLE>
<CAPTION>
Product                           Current Capacity            Additional forecast        Upside Max Capacity
                                  Based on monthly            time needed before       incremental to Current
                                  submission of 12            wafer start to meet             Capacity
                                   month forecast                Upside Demand
                                   (wafers/month)                                          (wafers/month)
<S>                          <C>                          <C>                          <C>
Analog CPE                                          100   8 weeks                      100 WAFERS
Analog CO                                           100   8 weeks                      100 WAFERS
Analog Line Driver                                   50   8 weeks                      50 WAFERS
</TABLE>
------------
*  less than
** greater than or equal to
<PAGE>

                                   EXHIBIT B
                                   PROCEDURES

B.1  QUALIFICATION, HOT RUNS & PILOT RUNS
     ------------------------------------

B.1.1  All pilot runs and hot runs ("Hot Lots") require Seller's written
consent.

B.1.2  For engineering lots, split and hold conditions will be as set by written
agreement with Seller, and no splits or hold conditions will be permitted
without Seller's written consent.

B.1.3  The minimum quantity of wafers for each split condition is two (2)
wafers.

B.1.4  The minimum quantity for each pilot run is twelve (12) wafer starts.
Regardless of anything to the contrary, Seller's only obligation for pilot runs
is that six (6) out of twelve (12) wafer starts shall meet the PCM
specifications agreed upon in writing before wafer start.

B.2.  PRODUCTION RUNS & ON-HOLD WAFERS
      --------------------------------

B.2.1  Unless otherwise conspicuously stated in a purchase order accepted and
signed by Seller, the minimum quantity in any lot shall be 25 wafers and no
staged wafer runs will be allowed in production without Seller's consent.

B.2.2  Subject to the other terms and conditions herein, by conspicuous written
request in Buyer's purchase order, Buyer may request staging of mask code and
gate array wafers as follows:

     (a)  the purchase order must include the holding stage and forecast release
          date;

     (b)  the minimum quantity for any stage release shall be at least six (6)
          wafers;

     (c)  all stage releases which have less than eighteen (18) wafers shall be
          subject to surcharge in an amount Seller will quote;

     (d) if the holding time for any step is more than four weeks, for each two
week and for each partial two week period thereafter, Buyer will pay a per hold
wafer surcharge equal to three percent (3%) of the total purchase order price;

     (e) if any on-hold time exceeds eight weeks, Buyer will pay Seller the full
purchase order price plus the applicable surcharges stated above;
<PAGE>

     (f) if any on-hold time exceeds ten weeks, in addition to all other
remedies, Seller may scrap the staged wafers from the production line, unless
before the expiration of that on-hold time Seller receives written request from
Buyer to return the staged wafers.

B.2.3  Regardless of anything to the contrary, once the purchase order has been
received by Seller, Seller will not be obligated to accept or honor orders or
requests to hold wafers.

B.3 Wafer Cycle Time. Unless otherwise agreed in writing, Wafer Cycle Time--the
    ----------------
time from wafer start (and written approval of PCM specifications) to final
visual inspection at Seller's premises--shall be as stated in Seller's written
quotation for the specific Products.
<PAGE>

                                Reciprocal NDA

                      RECIPROCAL NON-DISCLOSURE AGREEMENT

     Effective Date:     8/11/98
                         -------

     To protect certain confidential information that may be disclosed between
them. United Microelectronics Corporation, a California Corporation with
principal offices at 790 Palomar Ave. Sunnyvale, California ("UMC") and
Centillium Technology (the "Company") agree:
---------------------

  1.  This Reciprocal Non-Disclosure Agreement ("Agreement") shall only apply to
information designated as "CONFIDENTIAL" at the time of disclosure as follows:

     (a) Confidential Information disclosed in any tangible form or thing must
be marked or labeled clearly as "CONFIDENTIAL" or with a similar legend
sufficient to notify the receiving party that it is subject to the terms of this
Agreement;

     (b) Confidential Information disclosed in any of the manner must be clearly
identified as "CONFIDENTIAL" at the time of disclosure, and summarized in
reasonable detail and designated as "CONFIDENTIAL" in a writing delivered to the
receiving party within thirty (30) days of oral disclosure.

  2. Each party agrees that for a period of five (5) years, and notwithstanding
any termination, expiration or cancellation hereunder, it will hold in strict
confidence and not disclose to any third party any Confidential Information
received from the other party hereto except as expressly agreed upon in writing.
Each party further agrees that it will not use or incorporate any Confidential
Information received from the other party hereto for any purpose whatsoever
except solely for the evaluation and/or pursuit of mutually amicable business
relations between the Company and UMC. Notwithstanding anything to the contrary,
to the extend reasonably appropriate in connection with the evaluation and/or
pursuit of mutually amicable business relations, UMC may disclose Confidential
Information from Company to one or more of the foundries within the UMC Group
subject to the requirement that the parties will be bound as if such foundry was
part to this Agreement. For purposes of this Agreement, the foundries in the UMC
Group include United Microelectronics Corporation's Fabs I and II, United
Semiconductor Corporation, United Integrated Circuits Corporation, United
Silicon, Inc. and the joint venture to be formed to operate the foundry location
currently known as UMC's Module 5 in the Science Based Industrial Park, Hsin-Chu
City, Taiwan.

  3. Each party shall secure and safeguard any and all things, documents, work
in process, and work product that embodies Confidential Information of the other
in locked files or areas reasonably restricting access and preventing
unauthorized use and/or disclosure. Each party further agrees that it will
maintain reasonable procedures to prevent accidental or other loss of any
Confidential Information of the other, and to use at least the same degree of
care for such information as it uses to protect its own proprietary information.
In the event of any loss, disclosure or use of Confidential Information in
violation of this Agreement, the party involved shall immediately notify the
other.

  4. The obligations of this Agreement shall not apply to Confidential
Information which the receiving party shows is:

     (a) already in the possession of the receiving party at or before the time
     of disclosure hereunder as reasonably shown by evidence existing at the
     time of disclosure; or

                                      23
                               UMC CONFIDENTIAL

                                       24
<PAGE>

     (b) now or hereafter publicly known through no wrongful act of the
     receiving party (provided that if Confidential Information becomes publicly
     known this shall not excuse a prior breach); or

     (c) LAWFULLY RECEIVED FROM a THIRD PARTY WITHOUT OBLIGATION OF CONFIDENCE;
     OR

     (d) independently developed by the receiving party; or by persons not
     having access to the Confidential Information; or

     (e) approved for release by written authorization of the disclosing party

     (f) disclosed pursuant to the requirement or demand of a lawful
     governmental or judicial authority, but only to the extent required by
     operation of law, regulation of court order.

  5.  Upon termination, cancellation or expiration of this Agreement, or upon
written request of the disclosing party, the receiving party shall promptly
return to the disclosing party all documents and other tangible things
reflecting Confidential Information of the disclosing party, together with all
copies, extract, summaries and (except as provided by agreement) other material
derived therefrom.

  6.  Confidential Information shall remain the property of the disclosing
party. The parties agree that nothing in this Agreement (expressly or impliedly)
grants any patent, copyright, trademark, mask work, trade secret or other
property right to the receiving party, by licensee or otherwise. The parties do
not intend that any agency, joint venture or partnership relationship be created
between them by this Agreement.

  7.  Neither party has an obligation under this Agreement to purchase nay item
or service from the other or to offer for sale products using or incorporating
Confidential Information. Either party may, at its sole discretion, and without
using Confidential Information of the other, offer products for sale, modify
products and/or discontinue products.

  8.  Notwithstanding anything to the contrary, all processes, recipes, and
manufacturing, fabrication, assembly and testing techniques, and improvements
relating thereto ("process technology") provided and/or developed by or on
behalf of UMC shall be wholly owned by and the property of UMC and UMC shall not
be limited or restricted by any terms of this Agreement with respect to any
process technology unless clearly stated to the contrary in a writing signed by
an officer of UMC and identifying the specific information involved in precise
detail.

  9.  This Agreement shall be governed by and construed under the laws of
California.

  10.  There are no understandings, agreements, or representations, expressed or
implied, regarding the Confidential Information except as stated above. This
agreement may not be amended, modified or altered except by a writing signed by
both parties hereto.

UMC  COMPANY

By: /s/ Jean Tien                    By: /s/ William F. Mackenzie
    -------------                        ------------------------

Name/Title: Jean Tien                Name/Title: William F. Mackenzie
           ----------                            --------------------

Customer Engineering Director      Vice President, Operations

                                      24
                               UMC CONFIDENTIAL

                                       25

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