With IBMs sale of its embedded PowerPC 4XX family in April to Applied Micro Circuits Corp., analysts say the company is moving away from developing standard products entirely, chips used as storage and network controllers, to concentrate on developing custom solutions for a few key customers.
Those core applications include Apple Computer Inc.s Macintosh computer; IBMs own blade servers; and a variety of next-generation video game consoles that may eventually evolve into more general-purpose computing devices.
Currently, IBMs PowerPC public roadmap comprises three product lines: the 9XX series, used within the Macintosh and IBMs JS20 blade servers, currently being revamped for the mobile and server markets; the 7XX series, spearheaded by the PowerPC 750GX for embedded applications; and a pair of cores available for licensing.
The real work is behind the scenes, however, where IBM is developing the "Cell" processor for future entertainment consoles sold by Sony Corp.; the processor used by the "Xenon," Microsoft Corp.s next-generation Xbox; as well as the "Revolution," Nintendo Ltd.s next-generation console. IBM has already shipped more than 10 million PowerPCs to Nintendo for use in the current GameCube, each a 485MHz derivative of the G3 called the "Gekko."
During 2003, the PowerPCs penetration into non-compute applications such as storage and network controllers totaled just under 47 million units, according to Semico Research Corp. of Phoenix. The total includes sales from IBM as well as Freescale Semiconductor, the other primary developer of the PowerPC architecture. Austin, Texas-based Freescale will spin off from Motorola Inc. later this year as an independent company focused on designing and selling semiconductors.
By comparison, ARM Ltd.s embedded architecture sold 783 million units in 2003; MIPS Technologies Inc.s MIPS architecture sold 126 million units. Sales of embedded X86 processors from Intel Corp. and other suppliers was under 19 million units, mostly into point-of-sale terminals and kiosks.
With the sale of the PowerPC 4XX series in April for $227 million in cash, IBM essentially exited the standard products market, concluded Linley Gwennap, principal analyst with The Linley Group in Mountain View, Calif.
"This sale is likely the final step in IBMs strategy of divesting from the standard-product business," Gwennap wrote in a note to the companys clients. "The company will now focus its resources on developing products for a few large customers (such as Sony, Apple and IBMs systems business) as well as its ASIC and foundry business. This strategy reduces the companys product-development risk. IBM will continue to offer a few products, such as the PowerPC 7xx family, to third parties that request them."
"The PowerPC in the communications infrastructure goes head-to-head with MIPS, and thus is hampered," said Semico analyst Tony Massimini. "IBM decided to follow different path, and get into video games…across the three major platforms. Thats going to pump up the volume numbers for PowerPC going forward."
Instead, most of the true embedded work will be left to AMCC and to Freescale, which has yet to spell out its plans in the PowerPC space. The spinoff has announced a range of cores, including the e300 and e500, based on the PowerQICC cores for communications, and slated to scale beyond 1.5GHz; the e600, a G4-compatible symmetric-multiprocessing (SMP) chip expected to scale beyond 2GHz; and the e700, an unannounced 32-bit/64-bit microprocessor that should scale to 3GHz and beyond.
That doesnt mean that IBMs PowerPC architecture wont compete in the embedded space.
"I think youll see the PowerPC 970FX in a much wider range of applications, following the embedded market," said Jesse Stein, PowerPC marketing programs manager at IBM. "While frequency is a concern…first and foremost is power."
In addition, IBM will continue to market the 7XX series of processors, known more commonly as the basis for the Apple G3 line. The PowerPC 750GX builds upon the older PowerPC 750FX, adding a full-speed, 1MB Level 2 cache and the ability to run at 1.1GHz. IBM will still market solution in the 4XX series, but as customizable, system-on-a-chip solutions, Stein said.
IBMs real work is with its gaming-platform customers, including Microsoft, Sony, and Nintendo. Sony, Toshiba and IBM are developing the "Cell" processor, a modular design whose specifications are unknown. However, IBM engineers will apparently disclose more details about the chip at a conference in Vail, Colo., sponsored by the Institute for Electrical and Electronics Engineers.
According to a technology white paper supposedly authored by Pete Isensee of the Microsoft Xbox Technology Group that was making the rounds of game sites Wednesday, the "Xenon" Xbox 2 will use three 3.5GHz PowerPC custom cores, each with 64KB of Level 1 cache and a shared 1MB of Level 2 cache. The white papers authenticity could not be confirmed.
However, some of the early comments by other IBM customers indicate that clock speed will not drive the designs. In both the Sony and Nintendo designs, IBM will work with graphics-chip maker ATI Technologies Inc., Thornhill, Ontario, to generate graphics.
"I suppose I could give you a list of our technical specs, but I wont for a simple reason: They really dont matter," said Satoru Iwata, Nintendos president, during a press conference at the Electronic Entertainment Expo show in Los Angeles in May discussing the companys next-generation console, which would deliver an "unprecedented play experience". "The time when horsepower alone made an important difference is over."