International Business Machines Corp. on Wednesday pledged to
spend $3 billion over five years on semiconductor research, a move
to reassure customers that the technology underlying IBM's hardware
and software businesses will keep advancing.
The computer giant said the money will be directed toward two
major tasks--tackling technical obstacles to the miniaturization of
circuitry on conventional silicon chips and developing alternative
materials and technologies to keeping boosting computing speed
while consuming less energy.
IBM last year spent $6.2 billion on research and development.
Its latest plans essentially maintain its current spending levels
on chip research rather than increase them.
Still, the company said it is important to reinforce plans to
keep up its spending in the wake of recent developments,
particularly the pending sale to Lenovo Group Ltd. of a server
business that uses chips from Intel Corp. The deal will leave IBM
even more reliant on its other server and mainframe computer lines,
which use internally designed chips.
"We don't want anybody to be confused," said Steven Mills, a
senior vice president in charge of IBM's software and systems
businesses. "We need to reinforce our long-term commitment to the
hardware platforms that we have."
Another issue is the fate of IBM's chip-manufacturing
operations, which now produce products for its own systems and for
other customers. People familiar with the situation this spring
said Globalfoundries Inc. had been in talks to buy the IBM factory
in East Fishkill, N.Y., but no deal has been announced. IBM and
Globalfoundries spokesmen have declined to comment on that
possibility.
Many other computer makers have shed chip-related investments to
save money. Developing new semiconductor technology is extremely
expensive, while operating chip factories--which now cost $5
billion or more to build--is even more costly.
Roger Kay, an analyst at Endpoint Technologies Associates, said
IBM is likely to keep designing chips for its systems while turning
to services such as Globalfoundries to manufacture them. Its
underlying message is "we are still in that business but don't want
to pay for it all," he said.
IBM's research agenda underscores the increasing difficulty of
wringing more benefits from chips by shrinking the size of
transistors and other components. The pace of innovation, with the
number of transistors on a chip typically doubling approximately
every two years, is often described as Moore's Law, after Intel
co-founder Gordon Moore.
Intel, the world's largest chip maker by revenue, was forced
recently to announce a rare delay in completing its latest
production recipe. That technology shrinks the size of features on
its microprocessors to 14 nanometers--billionths of a meter--from
22 nanometers on many current Intel products.
Intel and others have expressed confidence in plans for at least
two future generations of chip production processes, which are
expected to reduce circuit dimensions to seven nanometers. But the
costs of that technology could be prohibitive, at least without
productivity gains in what the industry calls extreme ultraviolet
lithography, or EUV. The new technology departs from conventional
optical techniques to define microscopic circuit patterns on
chips.
IBM, one of many companies that has helped encourage EUV
development, said part of its research efforts will seek to help
overcome obstacles to shrinking circuitry on silicon chips to seven
nanometers and possibly beyond.
At the same time, IBM described a series of more esoteric
projects that include replacing silicon with graphene--a thin film
of pure carbon--or structures called carbon nanotubes. Other
research areas include "neurosynaptic" computing--a departure from
conventional computer designs that is expected to work more like a
human brain--and "quantum" computing, a long-discussed research
field that exploits the behavior of subatomic particles.
Rick Doherty, an analyst at Envisioneering Group, said it makes
sense for IBM to spread the risks associated with updating its
computers beyond just silicon-based technology. Like a cautious
roulette player, IBM is saying "we are going to bet on red and
black now, not just red," he said.
IBM said most of the research will be conducted at facilities in
Albany and Yorktown, New York, near San Jose, Calif., and in
Zurich, Switzerland.
Write to Don Clark at don.clark@wsj.com
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