IBM is the oldest and largest maker of computers in the world.
Its chip unit, which was transferred to GlobalFoundries, began its life with the IBM System/360 computer family when IBM developed Solid Logic Technology in 1964. The company produced millions of the chips at its plant in East Fishkill, N.Y.
The development followed a 1957 deal with Fairchild Semiconductors to produce silicon transistors for digital computers for the military. IBM’s push into mainframe computers, and its ability to bundle services, software and hardware was extremely effective-so much so that it prompted the U.S. Department of Justice to file antitrust charges in 1952. IBM waged battle with a legal army of 100 attorneys, but it lost the case that ultimately resulted in the famous 1956 consent decree. The U.S. government held that over IBM’s head for decades, with final phase out in 2002. During that time, IBM created a series of unprofitable units to prove its losses and established partnerships with companies such as Microsoft at the dawn of the PC era to show that other companies benefited from its developments and marketing muscle, as well.
IBM continued to develop chips within its microelectronics group for its mainframe computers and its PC unit for more than 50 years. One highlight came in 1989, when IBM signed a deal with Apple and Motorola to jointly develop the PowerPC chip (POWER is an acronym for Performance Optimized With Enhanced RISC). The deal was particularly noteworthy because of the market battles that IBM had fought with Apple in the early days of the personal computer.
IBM has continued with the POWER architecture for its server division, but its interest in semiconductor development began to wane when IBM sold off its PC unit to China’s Lenovo in 2005 and the company began shifting its focus from small computers to data centers and services. The culmination of that declining interest was a deal announced Oct. 20, 2014, to hand over its chip business to GlobalFoundries. That arrangement calls for IBM to pay GlobalFoundries $1.5 billion in cash, thousands of patents and a guaranteed contract for server chips for 10 years.
