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IBM’s Chip Unit on Chopping Block?

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2/7/2014 11:10 AM EST
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m00nshine
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Re: GlobalFoundries expansion
m00nshine   2/9/2014 9:57:33 AM
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Intel cant use their own fabs (ie F42) why would they want an old non-CE! Fab? They already close all other aquired fabs (Colorado and Mass.) Been there before. Tech, patents, and an opportunity to disrupt the GloFo/Samsung alliance as a reason, thats another story.

resistion
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Re: GlobalFoundries expansion
resistion   2/9/2014 3:21:48 AM
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GF is a better fit than Intel, but do they have the money or are they more influenced by Samsung.

GSMD
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Low margin businesses`
GSMD   2/9/2014 3:04:26 AM
This seems to be a growing trend by companies to walk away from low margin but still profitable businesses. A few years ago a fellow level scientist at one of the major semicon vendors was bemoaning this fact that profitable businesses were being dumped because they did not meet some margin criteria. This is not a western trend alone. Wipro and HCL in India stopped PC manufacturing last year after having neen in this business since the mid 80s. Capacitor manufacturing for example is still a profitable business. Will involve a lot of blood and sweat to keep the business going but you can make a decent living out of it. But the apppetite for slogging it out seems to have gone unless there is an unreasonable payout at the end of the rainbow ! What is wrong with retiring with a couple of GM cars, a good size house and say a few million dollars in the bank ?

Now as a former CEO/CFO, I can understand the business rationale. But from a social perspective this seems more of an issue of lesser rewards for top management. I looked at the financial nos of some of these canned businesses and there is nothing particularly bad with them. They are not glamorous high margin businesses but if executive salaries were kept in the lower 6 figures, some opex trimming  and leveraging the sales distribution channels, they can be run profitably. Anecdotal examples - Why does every senior exec who comes to India have to stay in the most expensive of hotels ? Some of these expense accounts can be mind blowing. This may be a drop in the bucket but this soon adds up. The credit scenario in the world is getting tighter and int. rates will be higher in the future so a lot of belt tightening will have to be done.  

I am surprised that there is no alarm in the US govt. at manufacturing being gutted so easily. Wrt IBM, part of the problem is a complete lack of strategy in the past decade. powerPC coudl hav ebeen a good alternative to x86 but IBM blew it in a major way. There was absoluetely no discerable drive within IBM to evangelize Power.

I will close with another piece of data. TSMC when come to our campus for recruitment offers less than Social networking companies. The former position is in Taiwan and the later is in India ! No wonder the Taiwanese can survive in manufacturing !

HS_SemiPro
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Re: GlobalFoundries expansion
HS_SemiPro   2/9/2014 12:46:54 AM
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Rick,

From a Fab point of view SOI or  Bulk do not need any special tools, same set of tools and infrastructure can be used to make intel tech or IBM tech.

But I don't think Intel would be interested in IBM fab, they have plenty of their own. ANd IBM's fab is pretty small any way.

On the other hand, Intel can be in IBM's Chip design or R&D units, to expand their business beyond  PCs and expand to high margin servers and other ASICs that IBM was making for other people.

Intel may be happy  to snap good R &D engineers in Semiconductor tech.

rick merritt
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Re: GlobalFoundries expansion
rick merritt   2/8/2014 11:04:15 PM
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@Resistion: Doesn't IBM's use of SOI and FD-SOI make IBM's fabs sub-optimal for Intel's products and processes?

resistion
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Re: GlobalFoundries expansion
resistion   2/8/2014 3:52:43 AM
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Money still seems pretty tight at GF, even with ATIC funding. Those billions seem largely for current activities; the new Malta fab. Also, GF's 20-10 nm roadmap seems largely fixed already.

http://www.bizjournals.com/albany/blog/2014/01/majority-of-design-done-on-second.html?page=all

resistion
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Intel?
resistion   2/8/2014 3:16:47 AM
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Maybe only Intel can afford to buy?

chipmonk0
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Re: Yes to GloFo
chipmonk0   2/8/2014 2:27:39 AM
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rather than invest a few billions at their Fishkill Fab to catch up with Intel won't IBM be better off going Fabless and start using Intel as a Foundry for chips of their own design ?

HS_SemiPro
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Re: Yes to GloFo
HS_SemiPro   2/8/2014 2:18:45 AM
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Fishkill Fab is mostly development FAB ( R&D) and plus a little bit capacity for running older ASICs and about not much wafer capacity for a legitimate foundry business, besides global already has decent size fab in upstate NY.

Yorktown is a pretty big  R & D center and not just for Semiconductors. Everything from Software, servers, devices, physical sciences,Mathematics  is reserached there.

Silicon and semiconductor research can't really be done without a FAB like facility.

IBM was already making X86 based server (which we call comodity servers) which was made using latest Intel technology, which they sold to Lenovo,  and these server sold at  cheaper prize  than servers based on IBM chips,

So it look like they can't sell their servers using generic chips.

IBM uses its  Semiconductors  Tech for its servers, that gives it advantge  in high end servers, once they sell their semiconductor business this high end Server business will go as well.

 

HS_SemiPro
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Re: IBM's Chip Unit on Chopping Block
HS_SemiPro   2/8/2014 2:04:39 AM
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IBM has a 8" FAB with about 1600 WSD capacity in Vermont &   300mm fab with about 600 WSD in Fishkill.

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