Thread regarding IBM layoffs

When your earnings multiple is this low, he purely means IBM stock is going to get panned less than most. Because it’s already in the gutter doesn’t make it a defensive stock ;p

@2bce - IBM Management didn't have to spend $10B for a new Fab -- they already had existing 200mm (BTV) and 300mm (EFK) lines, and just needed to continue to invest in the EFK line to get yields up to where it was profitable ... but failed to do so. Instead, they spent $24B on Ginni's wet dream, Red Hat. And now there's a worldwide IC shortage, with lines that are shutdown in Detroit and billions in partially assembled vehicles parked in outside lots that are waiting on ECMs and other control modules. You can't make this stuff up ... complete and utter incompetence on the part of IBM Management.

IBM exited out of chips because the cost of a new fab is approaching 10 billion. IBM just wasn’t driving enough volume to support a fab/design/tooling/personnel infrastructure. THUS the selloff. To give you an idea of the costs involved, IBM agreed to pay double for the chip sets manufactured by GF vs internal IBM costs. The models said they would still save money even though individual costs went up. Everything should have worked out, BUT GF also decided new fabs and infrastructure cost too much and thus abandoned 7NM technology and below. This left IBM and especially Power 9 having to support old designs waiting for Samsung to come up to speed on P10. I suspect that delay cost IBM half of their Power install base (note the shrink rate of Power for the 24 months before the first P10 boxes hit the market place (approx 20-25%)) That shrink rate resulted in a pile of porting and most likely the eventual death of Power as ISV’s decided to switch rather than wait. Power is now a much smaller Niche offering from IBM that specializes in large above 2TB memory or when the end users need just incredible thru put performance. Everything else is just fading away. So this is a rather long answer to say IBM’s exit from chips cost far far more than just the 2.5 billion to GF. More like a 3-4 billion a year run rate in addition to the OTC of 2.5 billion. Thanks Ginni your execution of Power is almost complete

IBM can still try their hand at potato chips!!!

Ginni’s total lack of vision was stunning. She doubled down on Sam’s vision of GTS services by chasing “shiny objects instead of investing in innovative technologies where IBM made its name and excelled. We can legitimately say “how do you make a small fortune (2 billion) in infrastructure services? Start with 19 billion” Isn’t it ironic AK is trying to move IBM back to Enterprise operations with a SW twist, as that’s where the innovation and money is. As I said above, stunning incompetence tolerated by the board. Heck of a job guys heck of a job

Maybe we should make our own chips. Oh, yeah, we paid GF to take that over. Good plan.