IBM Invests Nearly $4 Billion In Next-Gen Chip Tech

October 3, 2011 Timothy Prickett Morgan

It looks like IBM is going to stay in the chip manufacturing business for at least a few more years, which is good news for Power Systems-IBM i shops.

New York governor Andrew Cuomo announced last week that it was kicking in $400 million into various high-tech campuses of the State University of New York (SUNY) relating to the development of future chip technologies while at the same time IBM agreed to pump $3.6 billion into its chip research facilities in Yorktown Heights, New York, and in its chip manufacturing facilities in nearby East Fishkill. Cuomo also announced that a number of key chip makers agreed to put another $400 million into research relating to future chip making plants using 450 millimeter wafer technology.

The big news, as far as Power Systems and mainframe customers are concerned, is that IBM and its customers using the East Fishkill fab are working on 22 nanometer and 14 nanometer chip etching technologies, which will no doubt be used on future Power and mainframe processors. The governor said in this statement that Big Blue and its chip partners had invested over $10 billion in the past decade in chip making facilities, which are often called fabs. (I prefer wafer baker, personally.)

The second project that the chip makers and the state agreed to cooperate on was the development of 450 millimeter wafers, the next top on the ever-widening silicon wafer manufacturing game. Only a few years ago, 200 millimeter wafers were the norm, and now we have made the transition to 300 millimeter wafers. When you couple larger wafers with ever-shrinking transistor sizes, you can radically increase the number of chips per wafer, which should, in theory, lower manufacturing costs. The only trouble is that each successive jump in wafer size and each successive shrinking of etching processes costs progressively more money. A future wafer baker using 450 millimeter silicon cookies, which should hold about twice as many processors as a current 300 millimeter wafer, is estimated to cost more than $10 billion to build and equip. This is an astronomical amount of money that will require for those increased yields to be realized.

And that’s why IBM, Intel, GlobalFoundries (the spun out wafer baking operations of Advanced Micro Devices merged with Chartered Semiconductor), Samsung, and Taiwan Semiconductor Manufacturing Corp are all working together to come up with the technology needed to make and etch 450 millimeter wafers. Under normal circumstances, these companies, which hail from intensely competitive and protective nations, would never work together. But economically, they have little choice.

New York has been promoting itself as a chip center for the past 23 years, starting when Mario Cuomo was governor of the state. Most recently, New York managed to convince AMD to build an advanced 300 millimeter plant in Malta, New York, near the state capital and near a SUNY campus with expertise in chip and nanoscale technologies. This plant, known as Fab 8, will be fully operational in early 2013.

By making investments, New York gets to keep bragging rights and tax revenues from IBM and GlobalFoundries, as well as stimulating construction, research, teaching, and manufacturing jobs. Cuomo is hoping that the transition to 450 millimeter wafers and skinnier transistors in the 22 nanometer and 14 nanometer generations will yield $400 million in equipment purchases from companies located in New York. None of the chip makers have said that they will actually build a 450 millimeter wafer baker in New York, but that is clearly what Cuomo–indeed, both Cuomos–want to have happen.

All we want are Power8, Power 9, Power10, and Power11 processors. With pluses between generations, of course.

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