IBM opens Power Systems lab in Taiwan
Power chips stay home in Austin
Big Blue is opening up its first Power Systems development laboratory in Asia in an effort to do development less expensively and to better crack the high-growth Asian IT markets with its Power-based AIX, IBM i, and Linux systems.
But don't get the wrong idea. IBM is not shifting development of its Power processors, to Taiwan. For years now, Power chips have been developed in the Austin, Texas lab where AIX also calls home.
You will remember, of course, that IBM's first 64-bit PowerPC processors came out of its AS/400 division way back in 1995. It is these designs - code-named Muskie/Cobra, Northstar, Pulsar, S-Star, I-Star - not the ones out of the Austin lab - Power, Power2, and Power3 - that put IBM in the commercial RISC/Unix game. That AS/400 lab, in Rochester, Minnesota, still does work on chip and system development, but Austin is in the driver's seat. IBM also has a Power Systems development lab in Boblingen, Germany, which is where entry mainframe development was done for many years as well. High-end mainframe development is done at IBM's Poughkeepsie, New York lab.
That Pokie lab is also where IBM makes its System z mainframes and its high-end Power Systems boxes, and IBM invested $30m in upgrading the factory last April. IBM still makes entry and midrange Power gear in its Rochester factory, but just last October  Big Blue shuttered its Power Systems factories outside of Dublin, Ireland, moving the factory to Shenzhen, China. In May last year, IBM opened up a $90m factory in Singapore to make big Power Systems boxes as well as System z mainframes.
The European markets are now being served from these Asian factories. IBM stopped making RS/6000 iron in Austin years ago, consolidating it into the Rochester facility. IBM only makes high-end System x and BladeCenter servers on the Xeon and Opteron side of the server lineup, and has long-since outsourced their manufacturing. If costs get too high, Big Blue may some day be tempted to sell its factories and outsource even Power Systems and mainframe manufacturing.
According to an IBM spokesperson, the new Power Systems Development Laboratory in Taipei City, Taiwan will be run by Janice Wang, who joined IBM in 1986 and who was responsible for the creation of the Chinese version of DOS as well as some early PS/2 PCs that sold in Asia. Wang was named manager for the China Development Lab in 1999 and managed IBM's cross-divisional "pervasive computing" effort a few years back, bringing together IBM's hardware, systems software, and middleware into tuned and integrated stacks. The Taiwanese lab will focus on making the Power Systems machines more energy efficient and leave the processor design to the team back in Austin.
IBM's System and Technology Group, which designs and makes its chips, servers, and storage, already had a lab in Taiwan for server and storage design. Having it there was necessary given the fact that Big Blue uses ODMs and OEMs to make a large number of its x64-based servers and various storage platforms.
There will be plenty of people who will say that the opening up of a Power Systems lab in Taiwan is the first step in outsourcing Power chip and systems development overseas. They may be right, and they may not be. But IBM declined to comment on that future prospect. Considering how IBM wants to cut the costs in its server business , I think it is more likely that IBM will shift its remaining server manufacturing to Asia first - except for the exotic supercomputers that it is not allowed to build in China, which are still made in Rochester, and its beloved mainframes.
But, if a mainframe is cheaper to make in Singapore and ship back to the United States, at a certain low volume having two factories is a cost that IBM will not bear, regardless of the politics. Ditto for a Power Systems machine. Those jobs in Rochester and Poughkeepsie are always under pressure, and will remain so. Just as they are for Hewlett-Packard and Dell server line workers in Houston and Round Rock, respectively. ®