Slashdot Mirror
Apple Switch to Intel Not a Big Loss for IBM
KaushalParekh writes "An interesting article about how Apple's switch to Intel chips may not be that bad for IBM after all. "Apple sees an opportunity with Intel. But IBM continues the same chip development that allowed Apple to claim several firsts and fastests. Now, Big Blue will plow its research efforts into processors for game consoles and other consumer products that might one day knock the PC down a rung." Also, "a lucrative avenue for IBM in China, where the marriage of the Linux OS to PCs armed with [IBM] PowerPC chips presents some intriguing possibilities." And, "Large firms like Sony, Microsoft and Comcast are betting that a home-entertainment device, evolved from a game console or set-top box, will replace many of the PC's functions. IBM plans to be inside these new systems.""
It was already known when Apple announced the switch that it wouldn't mean a huge financial loss for IBM.
;)
The demand from Microsoft, Sony and Nintendo is a lot higher so IBM doesn't need to cry
I will play Mr. Smith: It was inevitable.
The cost of producing new leading edge semiconductor processors has always, and will always, grow at a very high rate. The cost of a chip fab is outrageous. It has been doubling for many years now. A new chip fab today costs about $4 Billion US!!! (For a 65nm fab) Most companies have started renovating there fabs to use ever larger wafers instead of building new fabs. Currently many fabs are using 300mm wafers. Many of the older 150mm fabs that have already upgraded to 200mm don't have the room to upgrade further.
Some big new 300mm fabs are:
D1C in Hillsboro, Oregon
F11X in Albuquerque, New Mexico
F24 in Leixlip, Ireland
The "break even" point for development costs has been skyrocketing!
In the 1980's and early 1990's 50,000 units were required to recoup development costs on a chip. At 130nm, fab costs hit more than $1 billion and the break-even point for chips was about 500,000 units. A chip made with a 65nm process needs approximately 5 million units to break even on development costs. With 45nm processes at the edge of the current horizon for chip manufactures, how many markets are there for a chip that has to sell 50 million units to break even!!!
For many years Motorola, AMD and other chip makers were moving steadily away from having there own fabs. Motorola was outsourcing 7% of its chip manufacturing in 1997, and over 30% in 2003. It seems this might have been a bad idea. Apple sited manufacturing capacity as one of its reasons for choosing Intel over AMD; and well, Motorola it seems just lost the Apple contract... (AMD is expanding its Dresden "Fab 36", and considering building a new fab to be opened early 2008. In the mean time they signed Singapore's Chartered Semiconductor to help make AMD64's starting in 2006.)
Currently chip fabs are operating at about 85% capacity; new fabs traditionally start getting built when 90% capacity is reached.
The biggest financial problem that chip manufactures face is the wavelength of light. For several generations of chips we have been using 193nm light. How is this possible you ask when chip feature sizes have been shrinking well below that size for several years now? Well I will let someone else explain:
Quote:
Since the 180nm technology node, the feature size has fallen BELOW the stepper wavelength. How can a 193nm wavelength of light expose gaps and widths that are 180nm wide? The laws of optics tell us that in order to resolve or "see" a gap of X nm in width, we must use a wavelength of light that is itself LESS than X nm in width. Today's feature sizes are down to 65nm and are still being printed with 193nm light! This seeming violation of the laws of physics and optics is being achieved by very clever techniques generally known as RET or Resolution Enhancement Techniques. Since the 180nm technology node, RET has been growing in cost and complexity from simple OPC (optical proximity correction) to PSM (phase shift mask) to the combination of OPC plus PSM, and now on to SRAF (sub-resolution assist features) which is ushering in a new category of RET called X-RET or Extreme-RET. The industry could have reduced the stepper wavelength from 193nm to 154nm, but a detailed analysis showed that simply shortening the stepper wavelength would be cost-prohibitive! Instead, use of 193nm has been extended to the 45nm technology node, but the gap between 193nm and 45nm is quite large and cannot be completely resolved even by the most advanced RET.
Fortunately, something called Immersion Lithography has been introduced. It has been tried before with mixed results, but the need for it has never been as urgent as it is now. By immersing the wafer in water, one can reduce the effective numerical aperture (NA), allowing 193nm light to act as if it were a shorter wavelength. The wafer now has to be immersed in water, however, and this creates new challenges for new types of resist and topcoat materials that can withstand the effects of water contamination. Today, however
And everyone thought IBM was at a loss when it chose the three largest game console manufacturers instead of a computer manufacturer with 4% market share.
Mozilla stole tabs from NetCaptor. So what? Right?
Apple and Intel strategically have very little issues (aside from Intel's current partner Microsoft... but that's another story)
Actually, Intel and Microsoft really haven't been getting along so well lately. Intel has become a big supporter of Linux and open source software; it is one of the founding members of OSDL and has contributed compilers and tons of driver code and specs to the open source community.
On the Microsoft side of coin, Microsoft tapped IBM to produce a custom-made CPU based on the PowerPC architecture for the Xbox 360, rather than using the x86 architecture the original Xbox used. Microsoft continues to work towards a Microsoft PC, which will marginalize Intel's role in the PC business if it succeeds.
No, Intel and Microsoft aren't the partners they used to be. Microsoft wants total domination of the PC industry, and that leaves Intel out in the cold. From what I can see, Intel's partnership with Apple gives it more than just shipping more units to another customer -- it gives Intel a strategic advantage against its growing enemy, Microsoft.
My blog
People like to take shots at the x86, but it is hard to deny that there are brilliant people working on it, really making implementations that fly. Intel's development team has a long proud history (they pretty much single-handedly turned the perception of CISC/RISC around with the Pentium Pro after all), and the AMD K8 team looked suspiciously much like the Alpha team at one point.
That is not to say that the POWER4 and derivatives are not impressive, they are, but the performance of chips like the AMD K8 really proves that if you have a competent team small details like the ISA don't matter all that much. I see no easy way for IBM to sneak into China, and it is actually a good thing; We are all better off with:
By comparison the PPC would be a fairly serious case of lock-in, only two companies manufacture chips (Freescale/Motorola and IBM), and Freescale mostly bothers with embedded applications.In summary, having some PPC around is nice, but having it take over a market would be a bad thing at this point.