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TSMC and IBM are set to sign a deal which the former will provide mainframe server chips to the latter / Photo by Peellden via Wikimedia Commons

 

One of the leading chip designers and providers for computers is Intel, which has been dominating the scene for quite some time. This dominance might have been challenged when Taiwan Semiconductor Manufacturing Company (TSMC) announced that they are set to sign a deal with International Business Machines (IBM) to provide their own mainframe server chips. This is big news in the industry, as there could now be legitimate competition for the use and creation of these kinds of server chips.

TSMC designs their own server chips, which are then produced by GlobalFoundries. This difference in supplier might very well deal a blow to TSMC's rival manufacturer. According to a reliable source of Nikkei, IBM is already setting their sights on using a smaller process for their next generation of mainframe servers, and the only company that can provide 7nm technology for this is TSMC. With Intel currently controlling more than 96% of the entire data center server market, this new trend of smaller chips could be the key for other businesses to start their own niche in this industry. Although IBM is not ignoring TSMC’s progress -- as they have already been creating their own version of a 10nm process, these are currently delayed until late 2019. Liu Chia-hao, a Trendforce analyst, states. “We think Intel could gradually lose some market share...for its most lucrative data center service chip business.”

The main difference between IBM and TSMC, and why IBM is signing a deal with TSMC, is IBM could use the new 7nm process chips immediately if need be, without the need to wait. While TSMC won’t be topping Intel on their dominance on the market any time soon, this new deal with IBM could very well be the start to more growth for the company in the near future.