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Report: IBM considering offloading POWER chip manufacturing

updated 06:04 pm EST, Fri February 7, 2014

Sale or partnership considered for poorly performing IBM department

According to sources familiar with the matter, IBM is pondering a sale of its semiconductor manufacturing facilities and business. The poorly-performing unit makes chips for IBM's own servers, as well as a limited amount of chips for other companies, with the major consumer of the chips being Nintendo, which uses POWER chips in its current Wii-U console.

The POWER family of processors were initially developed in the late 1980s and are still in active development now, nearly 25 years later. In the beginning, they utilized the POWER instruction set architecture (ISA), but that evolved into PowerPC in later generations and then to the current Power Architecture.

IBM still manufactures the POWER-series processor, an older version of which appeared in Apple's PowerPC line, as well as in Microsoft's Xbox 360. IBM's chip manufacturing process generated about $1.75 billion in sales, but dragged on the company's financials to the tune of $130 million after costs.

The Financial Times believes that IBM has assigned investment consultants Goldman Sachs to postulate scenarios for the chip manufacturing division. The company could either sell, or seek a partner for the wing, with GlobalFoundries and TSMC spoken of as potential suitors.

By Electronista Staff
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  1. The Vicar

    Junior Member

    Joined: 07-01-09

    Remember when Apple abandoned PowerPC and that VP of IBM made a statement to the press along the lines of "we don't know why Apple is complaining that the PowerPC chips are stagnating. We could have made them faster and better at any time, all they had to do was ask."

    IBM and Motorola ("let's standardize our entire business on PCs instead of Macs to make sure our competitors get a subsidy from us")... Apple sure chose a pair of clueless wonders to build CPUs for their earlier lines. With that history, it's only a matter of time before Intel reveals some kind of boneheaded idiocy. (Not that there haven't been plenty in the past, but the big ones are all PRE-Apple.)

  1. DiabloConQueso

    Fresh-Faced Recruit

    Joined: 06-11-08

    Apple complained that the PowerPC line was stagnating because IBM couldn't provide them with a roadmap beyond a year or two demonstrating the future of the processor, as opposed to Intel, who was happy to share with Apple what they intended to be doing with CPUs as far as 5 to 10 years out.

    When you're as meticulous and innovative as Apple, having some ballpark idea of what your goals need to be that far down the road is paramount to success.

  1. Charles Martin

    MacNN Editor

    Joined: 08-04-01

    I remember that a lot of people were pretty horrified to discover that Apple was going to jump ship, join "the enemy" and in fact had been testing the possibility of running on other chips for years ahead of the move.

    In hindsight, it was yet *another* example of Apple knows best, and knows it way before users/the press/the public knew it. Like Apple itself, Intel isn't perfect -- but the progress it has made over the last ten years is really nothing short of remarkable, and has benefitted Mac and non-Mac user alike.

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