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Senior Editor

The Power game

May 10, 20042 mins
Data CenterIBM

* The big news out of IBM last week

The big news out of IBM last week was its announcement of its first Power5-based servers. The eServer i5 family, formerly known as the iSeries, is aimed at small and midsized companies.

But for our purposes, the key is the Power5 chip. Our Special Focus this week ( takes a look at that chip and Big Blue’s plans and directions for it.

Among the highlights of the Power5-based servers are improved multi-threading and partitioning capabilities that analysts say could yield 35% performance gains over current Power4-based boxes.

According to our author ( the first Power5-based servers will have up to 4 processors. Down the road, IBM plans to build Power5 servers with up to 64 processors – double the number of processors allowed in Power4 servers. The extra capacity is made possible by providing more cache closer to the processor, which reduces inter-chip traffic, and moving the memory controller onto the Power5 chip, IBM says.

To execute its new high-end processor design, IBM has its new chip-making digs: Big Blue spent more than $2.5 billion to upgrade its semiconductor manufacturing and development facility in East Fishkill, N.Y. Following the renovation, IBM did some reorganizing on the corporate side. In January IBM announced plans to fold the technology group, which centers around its semiconductor business, into the systems group – a key consumer of Power chip technology. The company is now managing these groups as one.

With the new chip technology, upgraded facility and new corporate structure, IBM aims to reverse a trend of declining revenue for its semiconductor business. IBM’s technology group saw revenue drop 27% over year-earlier figures to $2.9 billion in 2003. In 2002, revenue fell 24% to $3.9 billion. In its annual report, Big Blue attributes the 2003 decline to actions taken in 2002 to refocus its microelectronics business on high-end foundry, ASICs and standard products, as well as sluggish demand from certain OEM clients.

Big Blue’s endgame is to become a leader in the 64-bit arena. Can the Power5 take it there? It could but Sun, AMD and others may have something to say about that.