IBM Licenses Power8 Chips To Chinese Startup

January 27, 2014 Timothy Prickett Morgan

Ahead of its reporting of disappointing system sales last week and the announcement that it was selling off its X86 server business to Lenovo, IBM also announced a new partnership in China that will see a startup funded by a provincial government and other industrial players make its own variants of the Power processors for servers.

The startup, called Suzhou PowerCore, is a sister company to an existing Power chip licensee called China Core, or C*Core for short. The companies share the same CEO, Jiang Zheng, but they will operate separately. Suzhou PowerCore has joined IBM’s OpenPower Consortium and is the first licensee of the intellectual property behind the Power8 processors, which IBM had early production samples of last summer and which are expected to be launched in new systems by the middle of this year.

The goal, explains Brad McCredie, a vice president in the Systems and Technology Group who is spearheading the OpenPower Consortium effort, is for Suzhou PowerCore to put together a chip development team and make customizations of the Power8 design that make it more suitable for servers and storage in the Chinese market. I suspect this is more of a teaching exercise than anything else, but it could also be a precursor to a longer and stronger partnership between IBM and China over Power-based technologies. At first, says McCredie, Suzhou PowerCore will make modest tweaks to the Power8 chips and use IBM’s foundry in East Fishkill, New York to make its variants of the Power8 chip. Over the longer term, Suzhou PowerCore will make more substantial tweaks and will also have the ability to have its variants run through other foundries. This will take years. But China is dead serious about making chips, and has variants of Sparc, Alpha, and MIPS chips in development for various systems and consumer devices already.

To my way of thinking, IBM is trying to figure out how its design tools can be fitted to other foundries and Suzhou PowerCore is helping do that work by virtue of enlightened self-interest. With Tyan a member of the consortium that has committed to making Power motherboards and Suzhow PowerCore committing to making future Power chips, this could be a long-term exit strategy in the making for IBM to leave the Power Systems manufacturing business. But admittedly I could be seeing plans and schemes that are not there. IBM is clearly not interested in making servers that don’t make money, and is happy to give the business to someone else that can make money from it. We know that from the sales of the low-end printer, memory, disk drive, PC, high-end printer, and now X86 server businesses, after all.

It could turn out that IBM stays in the Power chip game out to Power8+ and Power9 and is simply trying to expand the market. It seems clear that IBM is having trouble selling Power Systems iron in China now, so this is one way to capitalize on the server opportunity there.

The hope is that whatever Suzhou PowerCore does will be compatible with IBM i. Maybe we can get the iSeries brand fired up and make our own line? Stranger things have happened. . . .