NEW YORK -- IBM on Monday unveiled a new line of powerful computers based on breakthroughs it has made in chip design -- technology it will soon use to build processors for other computer makers.
Analysts said the new technology, a combination of silicon-on-insulator transistors and copper wiring, gives IBM's line of AS/400 servers, computers used to manage Web site functions, a nine month lead on the industry.
Silicon-on-insulator (SOI) can be used to reduce chip power consumption, which extends the battery life of portable products and reduces the heat generated by computers. IBM's copper technology allows for faster processor speeds.
"One of the critical aspects of getting computers out quickly to boost performance of the Web is to reduce heat," said Envisioneering analyst Richard Doherty. "You can only put a certain number of computers in a room before calling someone to put in a new cooling system, which could take months."
IBM is expected to use the new SOI and copper technologies to make chips for other computer makers.
A source familiar with the products confirmed that IBM will this week unveil an agreement to use its copper and silicon-on-insulator technology to make chips for Hewlett-Packard.
Compaq Computer said IBM will build Compaq's Alpha line of computer chips used to run its powerful business computers.
"IBM and Compaq have signed an agreement in which IBM will manufacture an Alpha copper chip for Compaq," said Compaq spokesman Dick Calandrella.
Calandrella did not have details about the value of the deal or how many chips will be manufactured. Compaq's line of Alpha chips dates back to the days of Digital Equipment Corp., acquired by Compaq in 1998.
When asked if the deal would replace an agreement with Samsung Electronics, which makes the Alpha chips, Calandrella said "Absolutely not. The chips will be made by both IBM and Samsung."
Calandrella added that future talks were expected for IBM to also make Alpha chips using its silicon-on-insulator (SOI) technology, which allows for better performance by using lower power and generating less heat.
IBM introduced copper chips in volume production in 1998, and soon after began making the new chips for Apple Computer Inc.
"The strategy so far has worked pretty well," said Doherty. "They keep a good percentage of the secret sauce to themselves. You don't see IBM supplying SOI to (leading server provider and IBM rival) Sun Microsystems Inc."
IBM said it is also seeking to use the SOI technology to boost the performance of its more powerful Unix server, the RS/6000 S80, later this year.
"This gives them about a nine month lead on the market, and in a market in which the Internet doubles every hundred days, that's significant," said Doherty.
"Other companies have also claimed to be working on SOI, but none that we know of (besides IBM) is yet to the stage of seriously considering it for volume mainstream manufacturing," Doherty wrote in a report.
