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New IBM Plant Will Mass Produce .1 Micron Chips
Ruger writes "AP News is carrying this story about IBM opening a new plant in upstate New York. What's most interesting about the story is that IBM will be producing .1 Micron Chips rather than the usual .25 or .18 produced by Intel and other chip makers, or .13 Micron chips they currently make for their PowerPC chips."
The real demand for using the smaller feature size is in two areas--low power and high performance. In the low-power market, you have all sorts of consumer electronics like cell phones. In the high performance, you're talking CPUs. Personally, I would love to see them build PowerPC chips.
From the article, it sounds like they'll be operating the plan under contract from other companies, so it will most likely be making chipsets for pagers and cell phones.
Of course, the market can be expected to change significantly between now and when the plant is actually ready to build chips.
Everything you say is true, until your final statement. If IBM is making next to nothing on their peecee, then why do they continue to sell them? Why have they branded/rebranded (Ambra anyone?) their pc lineup? They continue to sink major dollars into pushing them. Why do they do this, well they do it so they can have across the board solutions to push into their accounts. They realize that it's easier to get into a place if they can sell them top to bottom and then provide service. And in the end, it's the service that's the _real_ money maker (margins on the big iron isn't that great either, the competition in the market is very strong and _nobody_ pays retail on those things).
The pc isn't the ends to IBM (like it is to Dell/Gateway/etc), but it is a very critical part of the means. And in that fashion, they need Intel more than Intel needs them.