IBM Joins Three-Way Chip-Making Alliance

In a bid to speed development of the next generation of computer chips while also easing the financial burden of related research, IBM has announced it will ally with Chartered Semiconductor and Infineon Technologies to develop 65-nanometer (nm) chip-making capabilities.

The multiyear deal, financial terms of which were not disclosed, calls for each of the three companies to contribute engineers and other support in an effort to produce effective 65-nm technology, with an eye toward moving to even smaller 45-nm chips in the future. Most current plants operate at 90 nm.

Strength in Numbers

The companies said the move is an acknowledgment that developing smaller chip-making processes is becoming a challenge for individual companies and the industry as a whole.

IBM vice president John E. Kelly III said the alliance will yield more “first time right” chip designs, improving “time-to-market and cost for our customers.”

In fact, IBM (NYSE: IBM) spokesperson Rick Bause told the E-Commerce Times that the drive to develop next-generation development tools and processes will benefit the entire industry. He said the deal between Big Blue and the two other companies represents a global push. Chartered is based in Singapore and supported by the Singaporean government, while Infineon makes its headquarters in Munich, Germany.

The alliance, Bause said, also reduces the investment any one company must make in new technology. “It helps spread the risk and the cost burden,” he explained.

Outsourcing Capacity

Initial work will take place at IBM’s development lab, known as the Advanced Semiconductor Technology Center, with a total of 200 engineers from the three companies working together on the manufacturing process. IBM and Chartered are prepared to install new technologies at their most advanced fabrication plants, which will enable them to take on outsourced demand from Infineon and others.

Chartered CEO Chia Son Hwee said the move reflects the pressure on chip companies to deliver new technologies “faster than ever before and get it right the first time. The joint development model is critical to keeping fabless and fab-lite companies at the leading edge of process technologies.”

Outsourcing Victory

On another outsourcing front, IBM said it has scored an enhanced IT services deal with credit-report company Equifax.

Big Blue said it will take over Equifax’ computer operations for 10 years in a deal worth US$800 million. Late last month, IBM announced a 10-year, $1.1 billion deal to run the computers of Swiss power services giant ABB, marking one of the largest outsourcing deals made public to date.

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