IBM Corp is so confident that the PowerPC will be a runaway success as a personal computer processor that it has decided to pass up the right to fabricate Pentiums and successor chips for its own use – but in return for giving up the rights, it has persuaded Intel Corp to pay it an undisclosed cash sum – not a large amount, says Intel – and other considerations, and to grant it the right to make 80486 variants in larger numbers than was previously permitted. That last right could prove extremely valuable since presumably IBM is entitled to develop ever more powerful and functional variants provided that they do not infringe on anything that is specific to Pentium – and the need for the complexity of Pentium for the average user is still far from proven. IBM says that because it does not presently use the processes required to fabricate Pentium, it would have cost it a lot of money to put them in place, and this way it will have more resources to devote to PowerPC. We’ve made a commitment to PowerPC, James Cannavino, now described as IBM’s top strategist, told the Wall Street Journal: We just didn’t think it was productive for us to make Pentiums. IBM now has the right to make as many 80486-type parts as it buys from Intel previously it was restricted to making 20% of its own requirement. And the versions that it makes do not have to match those made by Intel in terms of variables such as clock speed. Intel says it will be able to make the transition to Pentium chip production more quickly now that IBM has agreed to make more 80486 chips, thus decreasing the production demand on Intel – IBM remains its biggest single customer. Cannavino said it would have cost IBM several hundred million dollars to put in lines from scratch to make the Pentium. The two also extended their patent cross licence pact.
