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April 13, 2004

IBM sells off PowerPC 400 chips to AMCC for $227m

In keeping with its desire to open up the Power processor architecture, IBM Corp yesterday sold off the PowerPC 400 series of embedded processors to San Diego-based Applied Micro Circuits Corp, a specialty maker of circuitry for networking and storage equipment.

By CBR Staff Writer

Under the agreement, AMCC has acquired the intellectual property and assets related to the PowerPC line for $227m. AMCC has also become a licensee of the Power architecture, in keeping with IBM’s Power Everywhere initiative.

With the Power Everywhere initiative, which IBM revealed a few weeks ago, Big Blue is trying to open up the licensing of Power chip technologies and related chip designing tools to stimulate the use of Power processors in all kinds of devices ranging from embedded machines to handhelds to desktops to servers and supercomputers.

While IBM knows that the appeal of the Power processor will be limited to its own workstations and servers in those markets and Apple desktops, smaller Power chips are in the major game machines and are in all kinds of embedded devices. IBM wants to foster the use of the Power architecture in these areas, and it knows that the only way it can do this is by letting go of Power. The company clearly believes that by fostering the use of Power chips by opening it up and by letting other companies fabricate Power chips, it will, in the long run, make more money than it otherwise would by keeping tight control over it.

AMCC uses IBM Microelectronics as a chip fab, and will continue this relationship after acquiring the PowerPC 400 series. The deal gives AMCC access to all of the advanced copper, SOI, strained silicon, and low-k chip making processes and the system on a chip technologies that IBM will be developing for future devices and systems. IBM will still be the fab for the official PowerPC 400 chips now owned by AMCC.

IBM, by the way, has retained the right to continue to develop and make its own PowerPC 400 series chips, and says that it will do so for ASICs and other customized chips and system-on-a-chip components. It is interesting to note that the BlueGene/L and BlueGene ridiculously parallel supercomputers are based on the PowerPC 440 cores. IBM would not sell off the PowerPC 400 series without being able to continue to advance the design for such machines.

Last month, IBM announced that Sony had licensed the Power architecture a few months after giving IBM $325m to help Big Blue perfect its 65 nanometer, 300mm wafer chip making processes. This is the process that IBM, Sony, and Toshiba will use for a Power chip derivative called Cell, which is thought to have many streamlined cores, as the basis of future electronics devices.

L-3 Communications, a defense electronics firm, last month kicked in $80m over five years to license Power chip designs and put them in various aerospace and defense devices and Chartered Semiconductor, a chip maker based in Singapore, announced that it had inked a deal with IBM to become the first non-IBM fab to make Power processors using IBM’s own 90 nanometer copper/SOI technologies. Chartered has five 200mm fabs and is building a sixth fab that uses 300mm technologies, just like IBM’s own East Fishkill, New York fab. Infineon and Samsung have also announced deals to customize Power chips and make them.

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This article is based on material originally published by ComputerWire

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