IBM’s G5 ‘yield issues’ slowing down Apple Computer

“IBM Corp.’s server business is coming off one of its better quarters, but its new sibling in the Systems and Technology Group, IBM’s microelectronics division, continues to struggle as yield problems plague its new manufacturing facility in East Fishkill, New York,” Tom Krazit reports for IDG News Service. “IBM’s chip business has lured some high-profile customers away from foundries in Taiwan such as Taiwan Semiconductor Manufacturing Co. Ltd. and United Microelectronics Corp. However, the business remains unprofitable, in part due to yield issues cited by John Joyce, senior vice president and chief financial officer at IBM, in a conference call last week.”

“A chip maker’s yield is the number of working processors that can be cut from a silicon wafer. IBM is attempting to engineer two changes to its chip business in the same period. It is rolling out its 90-nanometer process technology at the East Fishkill plant for building chips with smaller features than the previous 0.13-micron process generation, and sifting through the merger of the microelectronics business unit and the server business unit that was announced in January,” Krazit reports.

“The Armonk, New York, company’s manufacturing facilities are responsible for churning out IBM’s own Power products, such as the Power 4+ processor used in IBM’s servers and the PowerPC 970FX used in Apple Computer Inc.’s XServe… Yield problems are not uncommon when a chip maker shifts to a new process technology, said Peter Glaskowsky, formerly editor-in-chief of the Microprocessor Report and now an independent industry analyst,” Krazit reports. “Customers such as Apple that produce premium products are usually more interested in buying individual chips, putting the yield risk squarely on IBM’s shoulders, he said… While Apple’s market share doesn’t compare with PCs based on Intel processors, it accounts for more units than IBM’s server business at lower margins, Nathan Brookwood, principal analyst with Insight 64 in Saratoga, California.. Therefore IBM has a vested interest in increasing its yields, especially if Apple isn’t buying entire wafers, but doesn’t seem able to do so, he said.”

Krazit reports, “Apple doesn’t appear to be happy with IBM’s performance in the last quarter, blaming IBM on its own earnings call for the late arrival of the XServe G5 based on the new PowerPC 970FX processor. This is the first generation of Apple processors in which IBM hasn’t shared the role of supplier with Motorola Inc.’s chip division, Brookwood said.”

Full article here.


  1. The new CPU’s will eventually come and so will the next generation G5 PowerMacs and first generation G5 everything else. To keep it in perspective, this is still a darn sight better than the painfully slow torture of watching the G4 clockspeed creep upwards from 350 to 450 MHz at introduction to 500 MHz many months later and gradually to 733 MHz and beyond. During the same time frame the Pentium went from a few hundred MHz to 2 GHz and that put Apple on the defensive. IBM will come through soon. It’s their business and I would much rather rely upon IBM than Motorola.

  2. it’s not an easy thing to produce and debug these chips, they’ll get it right soon. I say, since the people working on the 970FX are probaby smarter then 99% of the people waiting for the new PowerMacs (including myself) Lets just wait until they get it right. And don’t start thinking that Intel and ADM are better�IBM gets around the same amount of performance/power/what-have-you out of 2GHz that intel and ADM get out of almost 1.5x the clock cycles. (sorry for the poor grammar, I’m getting tired. Good night all!)

  3. IBM is the new supplier of Mac processors. We all know that this is a long term arrrangement to catapult the Mac OS into the future. IBM isn’t going to damage thier longterm relationship with Apple and will shadow Apples commitment to advanced technology in spite of low demand. No Need to worry.

    IBM wins for losing…here.

    Long & strong.


  4. I love it that “neomonkey” says that “at least Intel and AMD know how to make the damn things!”

    Really? Is that why between them they’ve sold about 1/10th as many 64-bit processors as IBM?

    Get a clue. They make and sell shit. So what. Yugo knew how to make cars, but I wouldn’t have bought one.

  5. I have 233Mhz 192MB memory Mac G3 white version wich runs about as fast as my 2.4 Ghz PC with 512MB memory, and Intel Celeron. Alao I know it doesn’t run at 2.4 Ghz. Does mac give true values when they say there processor speeds?

  6. Intel knows? Please. Nothing stellar. At which rate? 1 out of 3 chip is a total failure and retired from market. Not to talk about chips retired because developers noticed they simply were not working right.

    As PC clones Intel works on the quantity not quality of their chips. Just good enough for the majority of PC users.

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