Big Blue Makes A Big Splash In The Chip Market

For most of the 1980s, there was an on-again, off-again debate within IBM: Should the world's largest chipmaker and perennial memory-chip pioneer sell semiconductors to external customers, not just internally? Last year, the decision came down in favor of competing in the open market. Market watchers such as Dataquest Inc. viewed IBM's goal--$500 million in outside sales within three years--as optimistic. That was because most observers figured the main thrust would come in so-called DRAM memory chips, a glutted market.

IBM, however, surprised everyone at the mid-May Custom Integrated Circuits Conference in San Diego. There, it announced a major push into the fast-growing market for application-specific integrated circuits, or ASICs. The company will offer its most advanced ASIC designs, including chips with an incredible 1.3 million gates, or logic switches. Customers will thus be able to use these ASICs as the guts of very complex electronics gear--or save money by combining several existing ASIC chips on one slice of silicon. Going to market with its best ASIC technology, says Dataquest, shows that IBM is serious about becoming a major player in chip markets.

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