IBM on Tuesday sold three of its PowerPC processors in a licensing deal with Applied Microcircuits, a 25-year-old networking and storage chip company.
Under the agreement, IBM will transfer its PowerPC 403, 405 and 440 processors to Applied Microcircuits. The latter will gain the rights to market the chips as stand-alone products for the embedded sector, meaning they could be used in products such as networking gear, an IBM representative said.
The chipmaker will pay IBM $227m for the chips and a Power architecture licence. The Power architecture is IBM's term for the common technological underpinnings shared by all of IBM's Power and PowerPC chips.
The deal is expected to close by the end of the quarter.
Although IBM will be giving up control of a good part of its PowerPC 400 family -- one of its three stand-alone PowerPC chip lines -- to Applied Microcircuits, Big Blue sees the deal as an opportunity to foster wider distribution of its PowerPC chips.
"It's consistent with our goal of finding new ways to open up the Power architecture to new partners and also more customers," an IBM representative said.
IBM, which has many Power architecture processors, including its Power4 server chip and its PowerPC 700 and PowerPC 970 chip families, has been making an effort lately to increase the presence of Power chips in the computer, communications and electronics markets.
Just two weeks ago, IBM made public a plan to let hardware makers and software developers gain more access to information and development tools for Power chips, which will aid them in creating new products and software for Power-based devices. IBM also plans to foster an open hardware and software marketplace for companies to create and/or purchase hardware and software for Power chips and to give IBM feedback on new features and other enhancements they would like to see in Power chips in the future, the company said.
IBM has made a number of changes to its chip business as a whole recently, including establishing a chip foundry business and combining its Microelectronics and Server groups into a new Systems and Technology Group.
Although Applied Microcircuits will market the three stand-alone chips, IBM will retain some stand-alone PowerPC 400 chips for applications such as digital video processing, as well as all of the patents related to the PowerPC 400 family. Big Blue will still be able to use the PowerPC 403, 405 and 440 processor cores in custom chips, which it designs for other companies under contract, the IBM representative said.
IBM will be Applied Microcircuits' PowerPC chip manufacturer, the companies said.
