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Semiconductor sale a vital part of IBM’s strategic realignment
The costs of staying at the leading edge of semiconductor research and manufacturing have also risen inexorably. IBM’s main “fab”, or chip plant, in East Fishkill, New York, pictured right, has absorbed billions of dollars of capital investment as the company has invested in the larger wafer sizes needed to stay competitive.
The technology race to produce ever-smaller features on chips – needed to maintain the exponential advance in cost-efficiency in semiconductors known as Moore’s Law – has also made this too costly a game for all but a small handful of companies.
“It’s harder and harder to achieve that doubling of chip performance every 18 months,” says Mr Bartels.
Yet dropping out of the tech industry’s most demanding race could have far-reaching consequences. IBM’s main chip architecture, known as Power, is credited by some analysts with being superior in servers to Intel’s x86 – though it is the Intel architecture that has steadily invaded data centres in recent years.
Abandoning further development could rob IBM of some its biggest technology advantages, some analysts warn.
Timeline: key moments at Big Blue
1964 IBM’s System/360 mainframe makes it the dominant force in the first era of corporate computing
1993 Lou Gerstner, right, arrives as chief executive in the midst of a financial crisis
1995 $3.5bn purchase of Lotus Development Corp lays the foundation for expansion of the software business
Fans watch a chess game 06 May 1997 in New York be©AFP
1996 In a seminal man versus machine moment, middle right, IBM’s Deep Blue computer beats world chess champion Garry Kasparov
2002 Acquisition of PwC consulting division for $3.5bn rounds out IBM’s move into business services
2002 Group sells hard drive business to Hitachi for $2bn
Lenovo
2005 Group sells PC division to Lenovo for $1.75bn
2008 IBM’s biggest acquisition, the $5bn purchase of business intelligence company Cognos, cements software’s role
Jan 2014 IBM sells commodity server business to Lenovo for $2.3bn; explores sale of semiconductor division
IBM Looking to Sell Chip Manufacturing Operations
The costs of staying at the leading edge of semiconductor research and manufacturing have also risen inexorably. IBM’s main “fab”, or chip plant, in East Fishkill, New York, pictured right, has absorbed billions of dollars of capital investment as the company has invested in the larger wafer sizes needed to stay competitive.
The technology race to produce ever-smaller features on chips – needed to maintain the exponential advance in cost-efficiency in semiconductors known as Moore’s Law – has also made this too costly a game for all but a small handful of companies.
“It’s harder and harder to achieve that doubling of chip performance every 18 months,” says Mr Bartels.
Yet dropping out of the tech industry’s most demanding race could have far-reaching consequences. IBM’s main chip architecture, known as Power, is credited by some analysts with being superior in servers to Intel’s x86 – though it is the Intel architecture that has steadily invaded data centres in recent years.
Abandoning further development could rob IBM of some its biggest technology advantages, some analysts warn.
Timeline: key moments at Big Blue
1964 IBM’s System/360 mainframe makes it the dominant force in the first era of corporate computing
1993 Lou Gerstner, right, arrives as chief executive in the midst of a financial crisis
1995 $3.5bn purchase of Lotus Development Corp lays the foundation for expansion of the software business
Fans watch a chess game 06 May 1997 in New York be©AFP
1996 In a seminal man versus machine moment, middle right, IBM’s Deep Blue computer beats world chess champion Garry Kasparov
2002 Acquisition of PwC consulting division for $3.5bn rounds out IBM’s move into business services
2002 Group sells hard drive business to Hitachi for $2bn
Lenovo
2005 Group sells PC division to Lenovo for $1.75bn
2008 IBM’s biggest acquisition, the $5bn purchase of business intelligence company Cognos, cements software’s role
Jan 2014 IBM sells commodity server business to Lenovo for $2.3bn; explores sale of semiconductor division
IBM Looking to Sell Chip Manufacturing Operations
