The big question in
semiconductor circles is how many of the job cuts are related to IBM's
semiconductor R&D work and what impact that will have.
to the Bloomberg report, at least 165 of the job cuts were in
semiconductor research and development. It's not known how many of these
jobs were based in upstate New York, where IBM is a central player in
the move to establish the Albany area as the premiere location for
semiconductor R&D globally. At least some of the R&D jobs
eliminated were at North Carolina's Research Triangle Park, according to
a separate report by the Herald-Sun, which also references
growth of the semiconductor R&D and manufacturing ecosystem in and around Albany has
been a major win for the U.S., and particularly for New York State.
While the final numbers are not yet in, it would appear that IBM has cut
at least some workers in that area. Will the IBM job cuts be a drag on
What do you mean government isn't making it easy? It was reported that NYS was giving IBM nearly $1million in tax breaks *per*job* it created in Albany. That is likely a high figure, but still, the government has been bank rolling IBM's semiconductor business for years.
You mean these companies are unpatriotic. After all it is OUR government, is not it? Yes I blame them and if they move the manufacturing abroad there should be a punitive tariff on their products entering this country. Unless we want very small government, Somalia-style anyone?
IBM is making a strategic exit from PowerPC and the embedded marketplace; they have announced EOL of nearly all of their PPC750 line of processors by the end of 2013. Wonder why they chose to exit that business - I thought their parts and support were excellent.
IBM doesn't invest in businesses that don't help increase EPS.
I do think the new CEO might be less inclined to look favorably on peripheral businesses that support the big iron cash cow, though. That could hurt over the long run.
Instead of selling technology to Foundries ( mostly offshore ) IBM should have chased the consumer SoC Foundry business itself. Even though low margin, these high volume products would have generated enough revenue to pay for R&D and next node Fabs.
US Semi co.s committed suicide by training Engineers from competing countries. Where would TSMC or Samsung be w/o many hardworking technologists who got their education & work experience in the US - starting with Morris Chang ( ex TI ) himself.
I fear the average American totally misunderstands what it means when a high tech company goes off shore. Nearly all think it because of the lower cost of wages That would be true if making fine geometry integrated circuits were labor intensive but as we EEs know, the fewer humans in your fab, the better. Still others think that environmental issues are central to the decision. China has come a long way and has certainly tightened up unfettered dumping, the days of dumping industrial waste into the nearest stream are over. The 900lb gorillas are taxes and governmental bureaucracy. For those of you over the age of 35, did you ever think you'd see the day where communist/former communists countries like China and Russia have lower taxes and a more pro-business attitude than the US????
Buddy, this is a tech site not a site for pushing misguided politics. Taxes are not the root cause. Decreasing taxes may change the time constant, but you still would eventually end up where we are today. I will give you some credit though, because you serendipitously provided a major cause in you asinine rhetorical question.
“For those of you over the age of 35, did you ever think you'd see the day where communist/former communists countries like China and Russia have lower taxes and a more pro-business attitude than the US????”
Maybe some people should think a little more????
This is what passes for discourse for some people - Bond Number cannot refute the demonstrably true statement that the lower taxes and pro-business attitudes in China and Russia are important factors in US companies out-sourcing so he reverts to what he knows best, name calling. And then he finishes with the suggestion that "some people should think a little more"....classic!
Didnt know "buddy" was considered name calling.
Please demonstrate where lower corporate taxes was the major driving force behind long term growth. I never said that lower corporate taxes are a bad thing. I just said that it is not the leading cause, and it alone can not change the long term climate.
I think you misunderstood the thinking comment.
Why would you not think countries in the span of decades are not capable of changing their business policies?
Russia may have lower taxes but that usually is offset by the necessary bribes, extortion and outright theft. Trust me.
As for China I have been there and I still hold my judgement, it is still a communist country and it shows and feels. It still may collapse or explode in our faces ...
But tech jobs also get shipped abroad to places with more regulation and sometimes higher corporate taxes.
Certainly, many of the countries with growing semiconductor industries rank lower than the U.S. in the World Bank's "Doing Business" report.
A personal opinion, but because political opinions about small government attract a lot more airplay in America than elsewhere, a perception of impenetrable bureaucracy tends to develop amongst Americans more frequently than for other people, but really, American regulations are relatively lax compared to many other countries.
The IBM layoff, to me, is more restructuring itself to the new economy.
No doubt, the manufacturing sectors are moving off shore. The more companies move off shore; the less the supply of talents. The momentum will just keep it going. How many fabrication are being done in the Silicon Valley? Silicon Valley today is hardly doing any semi-conductor related work. The current big Work-In-Progress are either cloud-related or social networking.
I'm sorry to hear the news. It is inevitable to any economy. I'm pretty sure talents who suffer today because of the layoff will find a way out to invent the next big thing. Stay Positive. ;)
IBM has evolved into a company focused on systems, software, and services. in addition, the market for the ASICs and big iron processors IBM has developed for internal and external use has decreased. So, the announcement should not be a shocker. IBM is still a strong competitor, but semiconductors are no longer a key core competency for the organization.
IBM is exiting the US semiconductor business because the profit margins are too "low". The company enjoys higher profit margins on services.
The foundry boys thought they could sustain themselves by producing one-hit-wonders like game console chips. When that business dried up - they were toast. They'll probably continue to produce ASICs but the ASIC services will not be centered in the USA.
I don't think that was ever really the plan for the Fishkill fab, though. I think from the outset, it was there to supply IBM's internal needs, and all of the foundry/partnering activities were just to shore up the finances.
With fab cost skyrocketing, there is no way that IBM internal need enough to justify its own fab. I bet that total annual wafer from IBM fab is way less than Wafers Qualcomm acquires from TSMC. It will be much cost effective for IBM just simply uses TSMC.
without there own Customized Chips that differentiate them from likes of HP, intel, Dell & other Server vendors, IBM System business will fall too, and their software business is dependent on selling Servers. All in 1 bundle.
I don't see IBM getting out of making their own chips in near future,
IBM Still own an 8" inch Fab in Vermont, that still makes profit..
I am pretty sure they can make it work on their 300mm Fab as well.
IBM hires and fires Engineers on a regular basis, This is just part of the cycle. Number of IBM Designers, process R&D and IBM research engineers still working will surpass lots of other companies.
I guess the main idea is that we jettison all our manufacturing and services ultimately only holding brands for which a small number of people will collect royalties. Unfortunately this will be a bad trip: the majority out of real work will eventually get poor, hungry and angry so they will string the rich minority high; the foreign manufacturing nation will stop paying anyway since if all the actual wealth creation goes abroad then eventually they will develop their own consumer market and be able to afford military on par with (or better than) ours...