IBM Out of Chip Manufacturing Business and General Execution Thread

http://www-03.ibm.com/press/us/en/pressrelease/45110.wss

There's IBM's own press release

 

IBM really didn't want the fabs anymore, but such a very motivated seller means there's a very good chance that it's not something worth paying money for.

It doesn't seem like GF was interested in the fabs and their heavy costs as much as the engineers and IP. The amount IBM paid is likely heavily based on the burden the manufacturing operations represent, on top of IBM contracting manufacturing from the division it has separated from.

Those more familiar with the fab industry would probably have more insight, but it reminds me of the GF spin-off where ATIC paid AMD for a struggling silicon manufacturing arm.
Hector Ruiz wrote a book that discussed about how he suckered Abu Dhabi into bidding high for GF, perhaps they learned a lesson about buying factories that can't seem to sell enough product, and how few other bidders there likely would be.
Whether there still isn't a catch is a different question.

Granted, GF as an organization has a far more intimate understanding of the business than a sovereign wealth fund would have had back then.

 

Not at all, GF have to manufacture them for 10 years.

 

Yea..according to reports..the division lost $700m last year. Even if they paid GF $1.5 billion, or rather $1.3 billion if we exclude the $200 million working capital, that will be lost in 2 years if they continue at the present rate. Do GF really think they can turn it around that fast?

 

Well, i dont think GF will run the fabs as IBM was doing ( so by product their own Power processors only ).

Basically, for the number of chips produced ( and sold ), the cost of the Fabs was way too high. Its why today, you nearly have only Samsung and Intel who are product their chips in their own Fabs now.

 

IIRC, IBM didn't only produce their own chips. They also made chips for others similar to TSMC.

Regards,
SB

 

Some, this was extremely limited... nothing like GF or TSMC .... their clients base and profit are, well, the money they do with that speak for itself.

 

Last time I remember IBM doing chips for anyone else was NVIDIA in the GF FX (or was it GF6?) times

 

But its not as if GF's fabs are running full and they really need the extra capacity do they? If IBM's fabs are in an even worse position, where are they going to magically find the customers to fill capacity?

True but also note that Samsung probably produces more chips for Apple than for themselves. And even Intel is doing a bit of foundry work for the likes of Altera AFAIK.

Yep..GF FX is the only one I remember IBM doing. And they switched back to TSMC pretty soon.

 

It should not be so hard to find somebody in need of 22nm process capable of making chips as complex as Power 8.
AFAIK IBM manufactured 130nm Geforce 6 line + NV36.

 

Well if it isn't that hard..surely IBM would have found them by now? Just to clarify, I'm just very curious about this whole deal. Obviously there must be some solid reasons for GF to go for it, I'm just trying to figure out what they are.

 

They manufactured CELL and the Xenon for a while.

 

& Nintendo*. I suppose all their orders would be quite a bit less lately.

*maybe not particularly lucrative considering die sizes.

 

Those three were more or less "their own chips" though, even if MS was part of Xenon development, Nintendo part of their CPUs development and Sony & Toshiba part of Cell

 

They make 32nm cisco chips too. IBM does a lot of low volume (but highly custom) niche stuff in addition to their power chips. It's important to remember fishkill in general is a small fab that has to cover a broad range of nodes (22nm-1x0nm, eventually 14nm finfet). IBM was never going to match tsmc, gf, etc. They targeted different markets (highly specialized vs high volume). It's just the highly specialized fab market pays out far less than it used to.

 

IBM unveils world’s first 7nm chip
With a silicon-germanium channel and EUV lithography, IBM crosses the 10nm barrier.

http://arstechnica.com/gadgets/2015/07/ibm-unveils-industrys-first-7nm-chip-moving-beyond-silicon/