Cypress Semiconductor has announced that it will be adopting palladium-based technology in an effort to use more environmentally friendly product packaging.

The firm will follow an industry-led initiative to reduce the use of lead, using nickel-palladium-gold frame technology for all new integrated circuit (IC) products by the end of the third quarter 2004.

The firm described the decision as a "major milestone", adding that it would be harnessing "innovative technology that has been accepted by the market".

The lead-free packaging will help Cypress ensure it meets the European Union's Restriction of Hazardous Substances (RoHS) legislation on a multi-step, banned substance elimination program.

Bob Blazer, vice president of assembly and test operations, commented: "Our goal is threefold: to create a solution that is environmentally friendly; fulfill our end-customer demands; and to create lead-free products that can be transitioned into our customer systems, easily. Our nickel-palladium-gold technology does all three."

Cypress says it hopes to be one of the first companies in the semiconductor industry to offer 100 per cent lead-free products.