When IBM Corp. (NYSE: IBM) celebrated its 100th anniversary this summer, I noticed a consistent theme throughout the media coverage of the milestone.
There was, of course, a great deal of reverence for a company that could endure a century's worth of economic ups and downs. But there was also a sometimes less-than-subtle implication that IBM represents the past of electronics innovation, not the future. For example, SiliconValleyWatcher blogger Tom Foremski wrote: "The world looks to Silicon Valley for innovation and not to IBM."
But it seems that Foremski and others may have been a bit premature in their proclamation of Big Blue's innovative demise. Last week, it was revealed that IBM is among a select group of chipmakers leading an effort to make the world's largest wafer a reality. IBM, GlobalFoundries, Intel, Samsung, and TSMC, working with Sematech and the SUNY-Albany College of Nanoscale Science and Engineering (CNSE), have formed the Global 450 Consortium (G450C), a $4.4 billion collaborative R&D effort to accelerate development of next-generation semiconductor manufacturing technologies and standards for 450mm wafers.
The movement to support 450mm scale-up has been hotly contested throughout the industry in recent years. In fact, a report from SEMI's Equipment Productivity Working Group (EPWG) termed the move one of largest threats to industry prosperity in our time. A somewhat melodramatic yet valid reaction, given the fact that some chip equipment makers have only recently begun to reap the return on investment (ROI) benefit of the transition from 200mm to 300mm. While 450mm offers the potential of doubling the number of dies per wafer and decreasing die cost, it has been widely asserted that the cost to develop 450mm tools would be prohibitive.
That is, of course, unless there was some way to spread the cost of development throughout the semiconductor value chain, which is exactly what the G450C aims to do. With startup funding of about $75 million from each of the five chipmakers involved -- and the expected infusion of funds from equipment makers looking to capitalize on the standardization of product requirements, tool-specific processes, and product definitions -- G450C appears to be positioned to tackle the bulk of the 200mm-to-300mm conversion complications.
This is an "unprecedented industry-wide collaboration between device makers, consortia and the equipment and materials industries," said Brian Krzanich, senior vice president and general manager of Manufacturing and Supply Chain for Intel Corp. (Nasdaq: INTC), in a blog on the company's Website.
IBM's breakthrough efforts don't stop there. Together with its partners in the Common Platform process technology alliance (aka Fishkill Alliance) Samsung and GlobalFoundries, IBM plans to invest $3.6 billion in developing next generation 22nm and 14nm transistor technology and related packaging. These next-generation process technologies are essential to building smaller, faster chip designs with improved power management and multimedia support, as well as longer battery life. IBM and its partners are not the only -- or biggest -- players pursuing this technology, but it is another example of IBM's commitment to progress.
For me, the takeaway is this: In today's fast food, disposable world, it is assumed that innovation is a young man's game, but IBM proves that longevity is not the antithesis of innovation -- it is the product of it.
Dennis, I, too, am a NYer and definitely felt a little "Take That Silicon Valley" when I wrote the piece LOL. In any case, the 450mm program should be great for NY, maybe my taxes will go down :)
I think one of the reasons why IBM has been the leader is because it has continued to innovate. Over the years, IBM has always invested into the latest technology. Cloud is the in-thing today in the IT world today and IBM is well ahead of others in that technology.
It is amazing to see how many people are still blasting IBM for being old. IBM is still one of the leading innovators and R&D companies around, couple that with the vast knowledge and customer base, IBM is going nowhere and it would be hard to imagine an electronics landscape without IBM being involved.
"if IBM wasn't a gigantic innovator in this space, they would have ceased to exist decades ago"
@DennisQ, I totally agree with you. From mainframes to PCs, from software to operating systems, from open source to services-IBM has done it all. It's rare to last 100 years in a business, but to last 100 years in the technology business is next to impossible.And IBM has prooved that it can indeed last 100 years in the technology business.
IBM was once a very diversified company with strong hold in semiconductor and software. But the process technology was never good and that might be the reason why AMD finally parted with them. It's a little surprising IBM still wants to invest money as a foundry even they have been pushing into the IT consulting with huge success and high profit margin.
Good article Diane... It's frustrating for me to hear people blast IBM as being old and stagnant... nothing could be further from the truth: if IBM wasn't a gigantic innovator in this space, they would have ceased to exist decades ago. In some ways, to counter-act the perception of being old-fashioned, I think IBM actually has to work even harder on being innovative and cutting edge than their competitors.
IBM is working on a wide variety of interesting technical endeavors. I believe the upper management is most certainly aware that they need to continue to innovate and find new sources of revenue. In addition, I think IBM has done a great job in marketing... Watson on Jeopardy, for example, was just a brilliant bit of exposure demonstrating to the mainstream audience that IBM is working on some near-magical technology.
Anyhow, I'm confident about IBM's future. And as a NY resident, it's nice to see the investment being made in the region to support G450C.
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Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
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Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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