IBM in chip talks with Acer

IBM is negotiating to license its advanced memory chip manufacturing technology to Acer, a source close to Big Blue says.

Jim Hu Staff Writer, CNET News.com
Jim Hu
covers home broadband services and the Net's portal giants.
Jim Hu
2 min read
IBM (IBM) is negotiating to license its advanced memory chip manufacturing technology to Acer, a source close to Big Blue said today.

Under the proposed agreement, IBM would provide Acer with the technology to make memory chips beyond the 64-megabit generation. Acer would begin producing future-generation 256-megabit chips based on an advanced 0.18-micron production process from IBM, the source said.

Acer would be the first company to receive such a license.

The licensed technology will come from IBM's advanced chip development facility in Fishkill, New York, where Big Blue, Siemens, and Toshiba have been engaged in joint development of DRAM (dynamic random access memory) chip technology. The plant is also renowned for producing IBM's copper chip technology.

At present, Acer's most powerful chip is a 64-megabit DRAM built on a 0.25 micron production process. Shrinking the width to 0.18 micron, as IBM has done, increases the amount of transistors that can be put on the chip and expands the chip's memory capacity.

The discussions come a little more than one month after Texas Instruments sold off its stake in a Taiwanese memory chip facility to former partner Acer in response to plummeting memory chip prices. As a result of the divestment, the relationship between the two companies--where TI provided the technology while Acer manufactured the chips--loosened up to allow Acer to shop around for other technology partners, Jim Handy of Dataquest said.

According to Handy, IBM and Acer have been forming relationships similar to the TI-Acer venture, where Big Blue licenses out its technology while Acer manufactures the product. Last month, for example, IBM signed an agreement to license out its liquid crystal display technology (which is used in notebook computer screens) to Acer.

IBM has much to gain from these today's development, namely by using the Acer venture as a litmus test or the 256-megabit memory market, added Handy. Also, if the market demands an increase for capacity, IBM can use Acer's capital and fabrication plants to its advantage.

"IBM likes to manufacturer in Taiwan; they have been in Taiwan for around 20 years," noted Handy. "There are a lot of people who understand Taiwanese business practices. There's every reason for them to continue to do manufacturing in Taiwan even if it's not with IBM manufacturing plants."