IBM chief says company must cut chip capacity
By Bruce Gain
EBN
(05/15/02 23:29 p.m. EST)
siliconstrategies.com
Without directly addressing rumors that IBM Corp. is seeking buyers for its giant Essex Junction, Vermont wafer fab, president and chief executive Sam Palmisano said that the company would make "adjustments" to IBM Microelectronics, but didn't provide any details.
"We have too much capacity. A year ago, with this [semiconductor] business, we were constrained, and we were growing at 50%. We had everybody; all of our key customers were screaming at us that we couldn't respond to the demand. Then we hit the wall," Palmisano said during an analyst meeting held today in New York.
"Now we have great processes and great technology, and we don't have a broken business. We have a short-term economic problem that will all pass. But we have excess capacity in the business, and we need to make some adjustments."
Adjustments made to IBM Microelectronics would result in increased productivity, Palmisano said. But IBM's chief executive skirted the issue when asked if headcount reductions would be involved.
"You need to look at the IBM headcount from the perspective of the different businesses. From a business level, these things are fundamentally different because the productivity associated with our software business is dramatically different than our services business, which is different than our PC business, which is different than our Microelectronics business. If we didn't hire anybody we would be down by 15,000 by attrition," Palmisano said. |
