IBM Announces USD 3 billion Investment in Chip Research with Hopes of Reviving Slumping Hardware Sales

Published Date : Jul 10, 2014

Computing and IT giant IBM has announced its plans to invest USD 3 billion exclusively in chip research over the next five years. The company hopes this investment will pay off in the form of a major breakthrough that will infuse life in its slumping hardware business.

This plan comes barely a week before its much-awaited announcement of second-quarter earnings. In the previous quarter, IBM had suffered a 23% drop in its hardware sector sales as compared to the same period last year. The previous quarter also saw IBM posting its lowest quarterly revenue since 2009.
The company is trying to look for new ways to shrink silicon chips while improving their efficiency and processing power. The company is looking to do this by developing new chip-making material such as carbon nanotubes, a material that is regarded as being more stable and heat-resistant than silicon. This, the company’s researchers reckon, will enable faster connections.

The company said that this massive investment is also a message to its investors about its commitment to the hardware space. Customers are demanding increasingly high levels of performance, and this trend will continue over the next decade as well, said an IBM official. The company hopes to deliver these essential ingredients, the spokesperson added. 

This investment in chip research equals half of all R&D investments by IBM last year. Meanwhile, the company will narrow its focus on intellectual property and divest some of its chip-manufacturing operations. There were reports about IBM being close to signing a deal with Globalfoundries Inc., a chipmaker.

Currently, IBM stands as the sole large company investing in the research of carbon chip.