Looks like the first wave of Fusion products will indeed be split between being built by AMD and TSMC.

Motherboard makers predict that AMD will retain production of the CPU portion of its Fusion processor at its own fabs or that of Chartered Semiconductor until at least 2009, with Taiwan Semiconductor Manufacturing Company (TSMC) to produce the graphics processor unit (GPU) portion of the processor.

AMD’s Fusion processor will consist of a GPU manufactured on a 55nm process by TSMC plus a silicon-on-insulator (SOI-) based CPU manufactured on a 45nm process at AMD’s Fab 36 and Fab 38 or outsourced to Chartered. A packaging and testing plant will then package the CPU and GPU together as a Fusion processor.

AMD is pushing its “asset light” FlexFab plan in cooperation with Chartered, TSMC and UMC to separate the supply risk. Some motherboard makers think that AMD will increase outsourcing of production to counter pricing competition from Intel.