IBM Fab Idled by Blackout

New York facility that makes G5 chips expected to be closed for two days after losing power.

Power outages struck IBMs computer chip fabrication plant in East Fishkill, N.Y., affecting production as key products for Nvidia and Apple ramp up.

The largest U.S. blackout ever struck New York on Thursday, leaving part of six U.S. states and the Canadian province of Ontario without power, an area where an estimated 50 million people live.

That area included Dutchess County, N.Y., home of IBMs newest chip foundry in East Fishkill. IBM officials said Friday that the plant had been shut down by the blackout, halting the production lines for about two days.

"Our main fab in Burlington [Vermont] was unaffected; there was a power blip but that wasnt an issue," IBM spokesman Bill OLeary said. "The Fishkill area was hit in fact, as you know, and the fab was affected."

When the power went down, the heavily-automated fab shifted into maintenance mode, halting the line and slowing down the production tools so that critical components in the semiconductor lithography tools werent affected, he said. Even establishing the amount of time the fab is expected to be down was difficult, OLeary said, because the power outage took down the companys voice mail system.

With power restored, IBM engineers on Friday afternoon were bringing up the tooling equipment, and preparing to begin production. "At a guess, Id have to say later Saturday," OLeary said of the production timetable.

Local power agencies asked IBM and surrounding businesses to reduce power and turn off air-conditioning systems, OLeary said. Most employees at the Fishkill plant were sent home. Central Hudson Gas & Electric, which serves the area, also implemented rolling blackouts on Friday to ease the pressure on the states electrical grid, the Poughkeepsie Journal reported.

IBMs 140,000-square-foot facility in East Fishkill is a critical piece of infrastructure for many companies including Analog Devices, Qualcomm and Xilinx. The $2.5 billion facility produces 300-mm wafers using a mix of 130-nm and 90-nm manufacturing processes. However, the facility also serves as a foundry for IBMs PowerPC G5 chip, used by Apples Power Mac G5, which is ramping production in anticipation of a scheduled launch this month. In March, IBM also said production of Nvidias GeForce FX graphics chip would begin this summer at the Fishkill facility.

Analysts said IBM and other foundries typically have a series of backup generators and other failsafes on hand to keep the line up and running for a short period of time, and then to slowly halt the production process after a prolonged delay.

"It would definitely last long enough to bring down the equipment in a safe manner," said Joanne Itow, a foundry analyst at Semico Research. "It doesnt affect the equipment in any way."

In 1999, an earthquake measuring 7.2 on the Richter scale struck Taiwan, sending shock waves rolling though the islands chip foundries and blacking out the island. Chip production was halted for days as the foundries assessed the damage and restarted the production lines. However, the halt in production rippled through the supply chain, placing critical components on allocation and halting some OEM manufacturing. For example, the quake halted assembly of Apples Powerbook notebooks for a week.

But analysts say that the Taiwan quake cracked critical components in the foundries furnaces, forcing them to be replaced. A simple power outage will affect production, but not as seriously.

"There are two issues: you want to make sure there are no safety issues, such as dealing with chemicals," said Risto J. Puhakka, a manufacturing analyst with VLSI Research. "Second, there is the minimal economic damage with respect to work in progress in wafers.

"My guess, without checking with them, is that the loss they see will be a loss of production for a few days until they bring everything back," Puhakka added.

Next page: Delay could hinder Apples Power Mac G5 shipping date.