IBM Gathers Asian Backers for Its Power Chip Push

IBM (NYSE:IBM - news) plans to unveil on Thursday a group of partners to promote its Power computer chips in a range of electronics, seeking to bring the community-minded innovation of Linux (news - web sites) software to hardware.


IBM said it will announce in Beijing an organization called Power.org (http://power.org/) with backers including Sony (6758.T), Novell (Nasdaq:NOVL - news), Chartered (Nasdaq:CHRT - news) and Semiconductor Manufacturing International (0981.HK).


The world's largest computer maker is seeking to capitalize on the in-roads IBM has had in winning over makers of major video game consoles, automotive electronics and other specialty electronics to use its Power microprocessor.


Power competes with microprocessors from Intel Corp. (Nasdaq:INTC - news), the dominant maker of chips used in personal computers, which has struggled to break into communications and consumer electronics markets -- where IBM has gained ground.


IBM's strategy of customizing Power chips to suit individual customers has helped it win over customers such as Sony's next-generation PlayStation and Microsoft's next X-Box.


"IBM has been a lot more successful than Intel in a lot of new-style devices such as video game consoles," said Gordon Haff, an analyst with industry research firm Illuminata. "It has been much more willing to partner and work with companies who require customized products than Intel has been," he said.


In a twist on the open-source model of software development, IBM is aiming to unlock the traditional way of developing hardware to allow partners to create key components that can expand the use of Power chips into new markets.


The pooled technical resources of Power.org are designed to spur development of new devices and component parts to work with Power microprocessors in consumer electronics, networking and video game markets, the IBM-led group said.


Power.org's members intend to define open technology standards in two areas: high-volume servers -- an area where rival Intel has held sway -- and in the internal "bus" which helps speed internal communication between parts of a device.


For its own part, IBM said it plans to add up to 150 additional engineers to work on Power applications for other customers at its design center in Shanghai.


At a press conference in Shanghai, IBM said chipmaker Shanghai Belling (600171.SS) is looking to use Power technology to create unspecified "advanced chips."


In another example, IBM said Culturecom (0343.HK), a maker of Linux-based computers aimed at the "first-time users" market and an existing IBM partner, is testing a new "tax organizer" system running on Power processors.


Haff said the analogy between the Power.org group and open-source software efforts such as Linux only goes so far. In effect, IBM is extending its existing one-to-one partnership ties to a broader set of companies who can take advantage of advances made by other partner companies, he said.