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The Six Five On the Road: IBM’s Semiconductor Vision and Ecosystem
by Daniel Newman | August 31, 2022

On this episode of The Six Five – On The Road hosts Daniel Newman and Patrick Moorhead had the opportunity to sit down with key executives across IBM to talk about their full-stack infrastructure and the future of computing.

In this interview segment, Daniel and Patrick were joined by Dr. Mukesh Khare, VP Hybrid Cloud at IBM Research, to talk about IBM’s semiconductor vision and ecosystem.

Watch their other IBM conversation segments:

The benefits of fundamental science and technology innovation with IBM’s Ross Mauri, GM IBM Z and LinuxONE

How IBM’s Cloud fits into their full stack and impacts the future of computing with Hillery Hunter, GM, Cloud Industry Platforms & Solutions, CTO IBM Cloud, and IBM Fellow

Distributed infrastructure, AI, and how IBM’s vision of the future of computing extends to Edge with Nicholas (Nick) Fuller Fuller, VP, Distributed Cloud at IBM Research

How Quantum Computing is shaping the future of IT with Jay Gambetta, IBM Fellow & VP Quantum Computing at IBM Research

Watch the full episode: IBM’s Full Stack Approach to the Future of Computing

To learn more about the IBM Research, check out their website.

Watch our interview here and be sure to subscribe to The Six Five Webcast so you never miss an episode.

Listen to the episode on your favorite streaming platform:

Disclaimer: The Six Five Webcast is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.

Transcript:

Patrick Moorhead: Hi. This is Pat Moorhead and we are here for another Six Five On the Road, and we are talking about IBM’s full stack infrastructure, but more importantly, the future of computing. And we’ve spent the last couple days going in between Yorktown, New York, and Albany, New York talking to many of IBM’s brightest folks at their research facilities.

Daniel Newman: Yeah, there’s a lot of very, very smart people that we’ve had the chance to sit down with, Pat. And for us as industry analysts, we’re really trying to inform ourselves so then therefore we can translate that knowledge out to all of you and to the market because the nature of computing is shifting so much and we’re seeing how workloads are being distributed. We’re seeing the impact that semiconductors are playing on the world. We’re seeing new technologies like Quantum rise and people are kind of wondering, well, how does this contribute to what the future’s going to be? And of course, data proliferating and exponentially growing. And IBM, interestingly, has a really full stack story that I think needs to be told more and so many people out there could benefit from hearing. So that’s what we did. We went on the road and you’ll see us sitting here, you’ll see us sitting in a few other spots, but really we’re going to talk to some great people and it’s going to be a great conversation if you can just give us a little bit of time.

Patrick Moorhead: Yeah. I’m super excited about this. And part of industry analysts’ role is to educate, and this is what this is about today. And I found it super special because it combined not only deep chip tech, but also all the way down to the practical level of delivering cloud services to clients.

Daniel Newman: And without further ado, we’re going to go to Dr. Khare and we’re going to talk about semiconductor research, hybrid cloud, and so much more. So join us. Mukesh, it is so great to have you here. We’re here in Albany at the NanoTech Center having this conversation about the full stack future of compute. And boy, what a great opportunity to have you join us on the Six Five.

Dr. Mukesh Khare: Thank you. It’s my honor to share what we do here in Albany NanoTech.

Patrick Moorhead: So much history with IBM and chips. I mean, you were doing your own first party Silicon for systems before it was cool. We talk about heterogeneous computing. You’d be doing a lot of that with ASICs, fixed function, accelerators. It is super exciting. And at one point, you were a major manufacturer. In fact, I worked for a systems provider in the ’90s that bought chips from IBM, Broad Scale Foundry, which I know that strategy has changed, but here we are. It’s an exciting week here with the chip sec and everything. But can you talk about your vision and your strategy moving forward? And before I forget, I want to point out the incredible amount of IP that you provide sometimes publicly, sometimes not to some of the biggest chip producers and designers on the planet.

Dr. Mukesh Khare: Thank you very much for, again, this opportunity. IBM as a company, our strategy is very clear. We are very laser focused on our hybrid cloud and AI strategy. And as you said, from the beginning, IBM has been working on the full stack approach. I call IBM stack the golden stack. It’s a golden stack, which includes everything. We have infrastructure business. We have our software business, which includes Red Hat, which is a hybrid cloud platform. And then we have consulting business to help client grow through the journey. So those are the three ingredients for IT industry. And today, we are here at the infrastructure part of our stack that we are going to talk about. And clearly semiconductor, as you know, semiconductor industry started in the US and IBM was the company who created these scaling laws, the laws that Bob Denart created, which essentially defined how do you scale transistor generation over generation. However, over period of time, IBM’s strategy has evolved as the industry evolved. Our view is very simple. We want to focus on things which we are good at, which we can do, and we want to partner with companies with the value that they bring to the table.

So today, what we focus on is the research and development part, because that’s our strength, that’s in our DNA. So we drive research and development agenda, a very strong R&D agenda for IBM’s business. And we partner with the companies who bring in manufacturing scales, or which who need certain IP for their business, so that it’s kind of a complimentary relationship. And that’s our new model where we are focusing on developing technology for our product, as well as helping our partners to build their product for their business. So that’s the new model that we are on right now.

Daniel Newman: Yeah. It’s really interesting. You mentioned… Did you call it the golden stack?

Dr. Mukesh Khare: Yes.

Daniel Newman: Is that what you called it?

Dr. Mukesh Khare: Yeah.

Daniel Newman: All right. I’m going to hold onto that one. I’m watching that. But it is really fascinating just having spent some time here seeing kind of how the research informs everything else and you’ve got a really big role in research. And so we’ve sat down actually on the Six Five, Arvin Krishna, your CEO, joined us and he also illuminated us on the visions for hybrid cloud and AI. And that’s something that seems you’re very focused on.

Dr. Mukesh Khare: That’s right.

Daniel Newman: How does that sort of continuum function from research to the development of end execution of what’s now your hybrid and AI strategy, which we’re very clear. Those are the areas that you talk about accelerating at, and that’s where right now IBM is accelerating.

Dr. Mukesh Khare: That’s the yes part on. So with the stack that we work on, we work with clients. We understand the client’s needs. And then that gives us feedback into what type of system technology, what type of chip technology, what type of process technology we need to develop to solve client problem. A great example of that is our Z16 recent announcement where we introduced an AI accelerator inside our tele processor, because we understood that there is a very strong need of… During transaction, AI inferencing. So we were able to translate that into what does it mean at the cloud level? What does it mean from a chip design level and at the process technology level?

And here in Albany NanoTech, we had launched an initiative called AI Hardware Research Center. And we used a partnership model to develop the core, the influencing core that then goes into our own chip that then solves our client’s problem. So the fact that we worked on the entire stack we come from, what does client want? And then we, fortunately at IBM, can go at the lowest possible level, at the process level, at the chip level to solve client problem in the best possible way.

Patrick Moorhead: So one of the things I appreciate about the folks that are doing research, and by the way, I like to separate research from development. There’s a lot of people who do development. There’s not a lot of people who do research, but a lot of things that I think about is our business models. Because at the end of the day, doing research and development for the sake of research and development doesn’t make the shareholders happy and doesn’t-

Daniel Newman: Your university.

Patrick Moorhead: Yeah, exactly. So what is the IBM business model? You’re in so many different places and I don’t hear a lot about it publicly, but I do ask you, can you talk a little bit about that?

Dr. Mukesh Khare: Yeah, so first to answer part of your question, we do R&D not for the sake of R&D. We are a business and anything that we do here in Albany NanoTech or in IBM research is to have an impact to a product, impact to an IBM product, as well as impact our partner’s product. So that’s the first part, it’s a research which will have an impact to a business objective at the end. So that’s the way we think. And that’s why IBM research is one of the, I guess, only extremely successful research organization in the world. The second part I will say is that, yes, the model for research… And we at IBM essentially invented a new model for research and development. We started the model of partnership where companies with a shared need go invest, and we started this partnership model more than 30 years ago, actually, with IBM’s [inaudible 00:09:21] Alliance, then transition into Logical Alliance.

And here we are, which is in Albany NanoTech, which is world’s most advanced public private partnership where we are collaborating and co-investing, which is very important because co-investment not in terms of dollars, but also in terms of intellectual capital, because we bring intellectual capital from IBM, our smart researchers from IBM, as well as other companies who are partnering with us, they bring their best people, best talent, their best equipment and best investment. So it’s a very unique model where we are co-creating at the end for the benefit of our business. So that’s the unique model. We do generate a significant amount of intellectual property IP. That definitely helps us make sure that we will have technology from an IBM lens. We will always have knowledge, IP and technology that we need for our business. And obviously, that can also help us to monetize that IP through licensing or through other models as well.

Daniel Newman: Yeah. The opportunity for that IP to translate to revenue is tremendous. And we of course know that there’s so many products that have hit the market and developed that IBM had a part to play in.

Dr. Mukesh Khare: That’s correct.

Daniel Newman: And many of them, the average consumer may not know that because where it got licensed or sold off or abandoned. I mean, the history of research. You just got to go to any of these facilities. You and I have had the fortune of going to headquarters and being in some of these and just seeing things and going, oh, wow, did not know IBM did that. And so it’s really, really interesting. And one of the areas that is very interesting is some of the IP leadership in semiconductors, I believe it was maybe earlier this year, last year. Get the dates right, but you announced 2-Nanometer. And of course that’s at the very leading edge of the leading edge. Talk a little bit about that type of innovation, where that’s going next, and how being on the front end is a big part of your strategy.

Dr. Mukesh Khare: That’s a great question. And yes, our goal is to be develop technology, which is absolutely leadership technology, because that’s what IBM business wants, right? You will speak with Ross Mauri, who is the general manager of IBM Z business. Product or technology requirement for IBM systems business, Z business and Power business is like the ultimate standard. If you can meet the requirement for that, you can meet requirement for everything else that is out there.

So clearly to us, leadership is very important for research division. And for me as a researcher, leader responsible for hybrid cloud technologies. Now that said, we have been driving this, especially in the Albany NanoTech Center. In 2015, we announced 7-Nanometer technology, which was world’s first announcement of such chip technology using lithography. That got adopted by all the major players. Then we were the first one to announce gate all around nano sheet technology.

And that’s very interesting because the idea of gate all around was always there, but how do you make it real for product? That was not known. And that’s where we from our product lens brought in the sheet idea. And that nano sheet idea is the idea we believe is going to be adopted by most of the companies have already announced. That will be the structure going forward after [inaudible 00:13:03]. And then yes, last year in 2021, actually we announced 2-Nanometer technology, which is a second generation of nano sheet technology. We are working on that technology here right now in Albany NanoTech with many partners. We are co-creating, perfecting that technology because we really want to make sure that both the technology is manufacturable, so that our manufacturing partners can take it for volume production. And at the end, technology has features that IBM needs for our own product.

Ross needs for a Z product as an example, we need for our cloud product. So we want to make sure both of those needs are covered as we continue to make progress. On this site, we are working on technologies beyond 2-Nanometer now. You will see more and more come out over a period of time as we perfect that technology with our partners in all of these cases. What’s beyond nano sheet? It’s coming in the pipeline. And another technology that we are very excited about is the chip led technology. And that’s going to be another future, which will supercharge [inaudible 00:14:14] in my view, beyond the traditional logic scaling. And in fact, during the pandemic, we invested together with New York state to build a fab here for chip led innovation and that’s coming online and you will see more and more of such technology essentially at the forefront coming out of this lab.

Patrick Moorhead: Mukesh, I would love to sit here for hours and talk with you about this. But listen, this is the first stop on talking about IBM’s full stack approach and also on the future of computing. So this is our first stop and I appreciate us kicking it off with you. And we’re going to talk to Ross. We’re going to talk to a lot of different people about this down the line, but thank you so much for your time and being on the Six Five for the first time. I appreciate that.

Dr. Mukesh Khare: Thank you. Thanks for the opportunity. Thanks for this great conversation. And we can’t wait to share with you all the exciting thing that we do at IBM.

Patrick Moorhead: That’s great. And if you want to tell us early, you can too.

Dr. Mukesh Khare: Thank you. We will do that.

Patrick Moorhead: Take care.

Dr. Mukesh Khare: Thank you.

Patrick Moorhead: It was great touching base with Mukesh. I’d only done Zoom with him before, but actually meeting him face to face was great. And I always learned something when I talk to him. We talk about what we do here at the facility in Albany, and it’s transistor, it’s manufacturing, it’s AI, but it’s also packaging. And that’s something I need to learn a little bit more about what they do here.

Daniel Newman: I like the way he was able to tie together how research really connects to what our vendor has been talking about so passionately and that’s the hybrid cloud and AI opportunities. And we’re starting to really see as a result that this is becoming much more crystallized in the interactions that we’re having with the executives at IBM. And if that’s going to stick in the market, it has to be the first thing on the tip of the tongue of all the executives. And that’s kind of what I’m sensing from these trips, from these tours. And of course, these executive conversations.

Patrick Moorhead: I like the business model reaffirmation too, because IBM can’t talk about all its customers and exactly who they do it with and who they do it for, but it was good affirmation to know, well, first of all, make chips for Z and Power and not just the general purpose parts, but also the ASECs, the accelerators. He talked about the block that he puts in [inaudible 00:16:53] for AI, but also the intellectual property that goes along with that. And I don’t think there’s a company out there, a designer and even a manufacturer with big names who IBM isn’t touching. They don’t talk about all of them, but that’s okay. I appreciate that anyways.

Daniel Newman: Well, not everyone wants credit for everything.

About the Author

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio