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Wednesday, October 20, 2004, 02:45 pm PT (05:45 pm ET)

G5 News: IBM to boost wafer fab output by 40% this quarter

Amid a strong third quarter, IBM said it will significantly increase its microprocessor production during the current quarter.

In what appears to be encouraging news for the G5 processor, IBM Corp. plans to boost the wafer output within its 300-mm fab over the next quarter, the company told Silicon Strategies on Monday.

Citing strong performance of its microprocessor sector during its third fiscal quarter, IBM senior vice president and chief financial officer, Mark Loughridge, said the company will to boost production by 40 percent in the fourth quarter.

Over the past year IBM has struggled with chip yields at its East Fishkill, N.Y. fab, a 130- and 90-nm plant. These shortcomings have directly affected Apple Computer, which relies on a constant flow of 64-bit G5 processors from the company's Microelectronics Group for its iMac and Power Mac line of desktop computers.

During its FY 04 fourth quarter conference call last week, Apple said that shipments of both the new iMac G5 and the PowerMac G5 were constrained due to ongoing supply constraints associated with IBM's G5 processor. However, the company it was enthusiastic over progress being made by IBM to increase G5 yields.

In September Apple shipped twice as many G5s as it did in the months July and August combined. The Mac maker said it believes progress will continue with a leveling of supply and demand for most variants of the G5 projected for the end of its fiscal Q1 05.

Yields of IBM's 2.5GHz G5 processor could take slightly longer to improve, Apple warned.