Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : SILICON STORAGE SSTI Flash Mem -- Ignore unavailable to you. Want to Upgrade?

To: Analog Kid who wrote (244)	7/19/1998 9:02:00 PM
From: flickerful	Respond to of 1881

from IBM...a look toward the future. chips.ibm.com 'Memory' Slips, So IBM Looks To Chip Future by Norm Alster Investors Business Daily 2/26/98 Producers of dynamic random-access memory, the most common type of memory chip, always seem to be either plunging in or pulling back from the volatile sector. In the back-off stage these days is IBM Microelectronics. The International Business Machines Corp. unit isn't getting out of DRAMs. But it is de-emphasizing this part of its chip business. IBM Microelectronics General Manager Michael Attardo feels he can pick up the slack with more application-specific integrated circuits. Already a leader in ASICs, IBM has been working on several new manufacturing processes that could strengthen its hand going forward. These include the CMOS 7S process for replacing aluminum with faster copper circuitry. IBM also is a leader in high-speed silicon germanium circuits, which should help its thrust into building chips for wireless devices. Earlier this month, IBM bought Comm-Quest Technologies Inc., an Encinitas, Calif.-based wireless-chip firm, for $180 million. Attardo recently spoke with IBD about his division's plans. IBD: What impact is IBM seeing from the currency turmoil in Asia? Attardo: We're seeing an impact from the (IBM) customers who do business in Asia - for example, people who sell wireless phones. The demand has significantly decreased for those phones. In any case, I think it will be a short- term problem - six to nine months. IBD: What are you seeing now in terms of DRAM pricing? Attardo: What we've seen is a stabilization of pricing. The 16-megabit DRAMs are holding at about $3 to $3.30 (less than half their late-'96 price). We've stopped seeing the precipitous declines that we saw throughout 1997. IBD: How much of the revenue of IBM Microelectronics comes from DRAMs? Attardo: We've been on a strategy to reduce our dependence on it. We're now down to anywhere from 20% to 25% (of our revenue). We're on a strategy to have no more of our portfolio than 20% to 25% in DRAMs - even if the price rebounds. IBD: Is IBM shifting capital spending toward building more ASICs? Attardo: Absolutely. It's consistent with our growth strategy. We're targeting custom logic as our growth engine. Last year we grew our custom-logic revenue by 72%. IBD: Other chips firms are shifting capacity from DRAMs to ASICs. What impact will this have on ASIC pricing? Attardo: I think there are certain barriers to entry here: intellectual property barriers; tool barriers - the ability to design and simulate and test very, very large numbers of circuits on a chip. I think very few companies have the ability to do that the way IBM has the ability to do that. IBD: So they'll find shifting to ASICs not as easy as they thought? Attardo: Absolutely. IBD: Some analysts believe IBM Microelectronics has excellent technology but needs to sharpen its marketing. Are you taking such steps? Attardo: We're doing things to improve our customer satisfaction. We're adding sales expertise as we speak. We're adding field application engineers in North America, Europe and Asia as we speak. We have about 42 what we call ''premier'' customers. All the key executives who report to me have a customer assigned to them - or multiple customers. So that customer can call on that executive at any time. And that executive will short-circuit things to make sure that customer is satisfied. IBD: IBM has received lots of attention for its new process that substitutes copper for aluminum. When will this copper technology begin to have a market impact? Attardo: I can tell you that it's currently being designed into our high-end machines. I can tell you that there are customers that are designing CMOS 7S into their products as we speak. Those products come to market in early 1999. IBD: What sort of products? Attardo: The first ones will be data-processing applications - high-end machines. IBD: Given the Asia and DRAM problems, has IBM Microelectronics managed to stay in the black? Attardo: We've been in the black. We're quite profitable. But not as profitable as we were in 1995. (C) Copyright 1998 Investors Business Daily, Inc. Metadata: IBM I/3573 E/IBD E/SN1 E/TECH ------------------------------------------------------------------------ Last update 7/19/98