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IBM cooks chips to new recipe

By streamlining its custom chip-building program, IBM aims to save customers time and money--and maybe squeeze out more profits for itself.

IBM plans to kick off a streamlined custom chipmaking service Monday, hoping to drum up more profits--and save customers time and money--by adding a new wrinkle to its existing program.

Big Blue said its Microelectronics division will unveil the Customized Control Processor service (CCP) at the Embedded Processor Forum in San Jose, Calif. Under the program, IBM unit will create system-on-a-chip (SOC) processors tailored for clients such as networking gear providers and consumer-electronics makers. These chips, though, won't be completely customized, but will rely on processing cores, or blocks, that can be used in a wide variety of products.

"We found that 70 (percent) or 80 percent of customers' design content was the same," said Tom Reeves, vice president of custom chip solutions at IBM Microelectronics. "They all wanted the same basic building blocks. The negative was all these customers were doing the design work themselves, over and over again. This product does it once."

The program is part of an effort by IBM to mine more profits from its chip business by better marketing its expertise in chip manufacturing, research and design that other companies simply don't have.

IBM already works with big-name chipmakers, such as Sony and Advanced Micro Devices, and manufactures chips for Nvidia, Qualcomm and Xilinx. Overall, the company's goal is to serve as the chip godfather for twenty or so marquee manufacturers who don't want to run their own factories or can't afford to sponsor research into futuristic transistors or materials. In some ways, IBM is emerging as Intel's biggest competitor.

The CCP service aims to speed development time for chips by constructing them around a pre-built PowerPC 405 processor core, thus avoiding the need to design a new core from the ground up. Design efforts can be channeled instead into customizing the processor with features specific to the kind of product it will be used in.

IBM came up with the idea after studying customers of its existing application-specific integrated circuit (ASIC) custom chip program, which creates processors from scratch. The company determined there was a market for chips that fell between those created from a blank sheet and those made with off-the-shelf parts. Using the standard processor core shortens development times, but customization helps each customer avoid a "me too" chip.

For IBM, the program slots in between its standard chip products and its ASIC business. CCP processors will be different from ASIC chips in several ways, the most important of which is time to market, Reeves said. Where an ASIC design takes between 18 months and 24 months, a CCP chip can be brought to market in 6 months to 12 months.

In the end, a hardware manufacturer using CCP is likely to spend less money on development and to bring a product to market more quickly, possibly gaining an advantage on competitors. The benefit to customers is mainly in access to newer, more advanced products more quickly, according to IBM.

So far, IBM has worked with several customers under an effort to perfect the CCP program, Reeves said. But the Armonk, N.Y.-based company wouldn't reveal who they were and wouldn't say whether or not they will use the services to create actual products.

Analysts believe the CCP could help IBM Microelectronics capture more business from companies such as network equipment makers, who may be considering custom chips.

"What they've done is to trim an entire six months off of the development cycle. It's a unique niche they've carved out for themselves here," said Cary Snyder, an analyst with Forward Concepts.

The first chips to come out of the CCP program look likely to be used in networking equipment, such as wireless base stations, switches and routers. But IBM plans to add several CCP options based on ARM processor cores in the future, opening the program to a larger number of consumer-electronics customers.

Where PowerPC chips are used mainly in networking, ARM processor cores--designed by U.K.-based ARM--are popular in consumer-electronics devices, hard drives, personal digital assistants and cell phones.