IBM Ramps Up Custom-Chip Delivery
James Maguire, www.NewsFactor.com
Hoping to grow its market share in the lucrative custom chip market, IBM (NYSE: IBM - news) has launched a chipmaking service that will streamline the design and manufacture of custom chips. IBM hopes its new Customized Control Processor (CCP) service will combine the best of both worlds: customization and efficiency. By fabricating system-on-a-chip (SOC) processors on pre-built cores, Big Blue expects to deliver custom chips with far greater speed.
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IBM's primary thrust in its microprocessor business is custom chips, said Gartner analyst Richard Gordon. Its new CCP is an effort to "expand the market for 'semi-custom,' you might call it, or 'configurable custom,'" he told NewsFactor.
Forrester analyst Rob Enderle told NewsFactor that IBM's efforts "to use mass-production type technologies to build a custom kind of chip could do some interesting things for them in the embedded market, which is where those chips play."
Building Its Business
IBM's current list of chip clients includes some industry heavyweights, like Qualcomm (Nasdaq: QCOM - news) and Nvidia (Nasdaq: NVDA - news), and the company has alliances with chipmaking giants AMD (NYSE: AMD - news) and Sony (NYSE: SNE - news). By streamlining its design process with CCP, the company hopes to become the vendor of choice for the many consumer electronics manufacturers who do not have their own chipmaking facilities. The goal is to place IBM-fabricated chips in a plethora of devices like personal digital assistants and cell phones.
Industry observers also expect that CCP will enable IBM to grow its business among network gear manufacturers. The initial designs to be fabricated by the CCP service most probably will be in networking gear like routers and switches.
New Niche
IBM Microelectronics already has a "boutique" chip service, its application-specific integrated circuit (ASIC) program, in which it fabricates chips to order from scratch. "An ASIC is custom designed for one customer -- it has a very protracted and intense design phase for one specific use," Gordon said.
It also has a standard chip business, building mass-produced processors. The company hopes its new CCP service will bridge these two existing programs.
"A configurable core like this will fit in a programmable device, which means you can use a standard offering and let the customer tweak it for their own needs," Gordon said.
Shorter Delivery
The goal of the CCP service is to trim development time from the delivery of custom chips using IBM's pre-built PowerPC 405. Chip designers will focus on adding individual specifications for each client to this core processor, thereby delivering a custom chip in as much as six months to a year faster than if it had been designed from scratch.
"Often, when you're researching a new technology, a lot of the cost goes into the trial platforms that are developed," Enderle said. "So if you lower the cost of the trials, you can experiment at a much greater pace and much lower cost.
"If it proves out, it could be significant feather in IBM's cap, and provide them with a competitive edge," he said.
If all goes according to plan, IBM will increase its bottom line by delivering custom chips to manufacturers who in turn will be able to gain competitive advantage by by acquiring custom chip with a greatly reduced lead time.
IBM representatives were not immediately available for comment.
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