IBM confirms PowerPC G5 CPU ongoing yield issues; some improvement seen

IBM has confirmed its PowerPC G5 CPU yield issues, which was noted in Apple’s financial results conference call eariler this week as the reason for the delays in the Xserve G5s:

“The Microelectronics Division has been in the red for some time. During a conference call with analysts, John Joyce, senior vice president and chief financial officer for IBM, said the former technology unit lost $150 million on a pro forma basis in the first quarter of 2004 alone,” Mark LaPedus reports for Silicon Strategies.

“One of the problems is ongoing yield issues within the company’s 300-mm fab in East Fishkill, N.Y. For months, IBM has been struggling with yields in the fab, a 130- and 90-nm plant,” LaPedus reports. “‘We do see demand, but we need to make the products,’ Joyce said. ‘”We need to improve our yields in our 300-mm plant. Our yields did see some improvement, but not as fast (as the company had hoped).'”

LaPedus reports, “IBM is seeing better-than-expected yields within its 200-mm plant in Burlington, Vt., he said. But profits within the 200-mm fab did not offset ongoing losses within the 300-mm fab and a sudden drop in IP revenues in the first quarter, he said. Joyce believes the technology unit will become profitable in 2004, due to increased chip demand, improving yields and flat IP sales.”

Full article here. (Attribution: MacNN)


  1. Well, at least IBM sounds optimistic that they’ll be able to get these problems under control. Apple has had some BAD LUCK the last few years on CPUs–first Moto and now IBM. I’ve got my fingers crossed IBM will be more persistent and reliable than Moto, though so far IBM hasn’t done it.

  2. They aren’t make chocolate chip cookies so these things do sometimes have fits and starts ramping up new techology. I seem to remember some issues at the Fishkill plant a while back. Patience.

  3. Intel should change their motto from “Intel Inside” to “At Least We Can Manufacture The Fscking Things.”

    Must be interesting to hear gallows humor around Apple headquarters:

    “When will be shipping iPod mini’s to Europe?”

    “Hah, around the same time we ship 3 GHz Power Macs!”

    “Oh yeah, well that’ll be around the same time we open the EU iTMS!”

    “Hehehe! I bet that’s right after we deliver G5 PowerBooks!”

    “Sure, you got it, the day after iMac sales increase!”

  4. I can understand how people can have probs – very rarely things go 100%.
    But problems for *months* ? C’mon – cause and effect. Find out the cause and fix it.

  5. OJ, stop spreading the truth! It is supposed to be a secret!

    Hey, all those things are told to happen in 2004. Kind Apple needs a miracle but they have business plans for miracles.

    The only one point that remain is the iMac sale increase: OJ, with that you lost all credibility of havin in-house information, hence yours is just a joke.

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  6. Um, there’s still seven MONTHS left in 2004 – Apple and IBM still have lots of time for figuring things out and getting them out to the public. Now, if this same sort of story is STILL bouncing around in Aug/Sep, and nothing else has happened with hardware releases from Apple, THEN I’ll start to get worried. But I’m not chomping at the bit for the next, biggest, best thing from Apple just yet. I’m happily playing/working along on my 800/640 14″ dual iBook.

  7. as long as apple lags on new releases, the better my powerbook g4 12″ will continue to look. Nothing irks me more than seeing a substantially better model of the computer I currently own. because then the “keeping up with the joneses” syndrome sets in . . .

  8. This is something we do need to worry about.

    We are depending on the “good will” of IBM. There is no profit with the Power5 chip at the current production levels. IBM answers to their board not G5 users.

    With the ongoing Adobe product development vs. Apple we the users may find our self with the best OS hands down, however, we will lack access to new software due to the fact that all software will be developed for one OS only.

    The same fate that forced Moto to stop any meaningful R&D may soon rear its ugly head at IBM.

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