I wanted to share with you the following article that was published by the Times Union:

Times Union: IBM sees 'money ... brains' in region

Research official, in visit, talks up value of semiconductor work locally

By Larry Rulison

Published 9:49 pm, Friday, September 12, 2014

John Kelly, head of research for IBM speaks to the gathering at a breakfast at Union College Friday morning Sept. 12, 2014 in Schenectady, N.Y. (Skip Dickstein/Times Union)

Schenectady

Five years from now, IBM may no longer own computer chip manufacturing operations in the Hudson Valley.

But according to John Kelly, director of IBM Research, the company's semiconductor research operations here in Albany have become more valuable than ever as the company invests heavily in cognitive computing and the world's most powerful supercomputers.

"We're perfectly positioned here," Kelly said after a speech Friday at Union College in Schenectady, his alma mater. "And it's not just about the money. The brains are here too."

Even as IBM reportedly seeks to rid itself of costly, low-margin manufacturing operations such as its aging chip factory in Dutchess County, it is planning to rely even more on the cutting-edge chip technologies it is developing in its labs at SUNY Polytechnic Institute in Albany, formerly known as theSUNY College of Nanoscale Science and Engineering.

In July, IBM announced that it would spend $3 billion over the next five years on semiconductor research, much of which would occur in Albany as well as its corporate research laboratory in Westchester County.

But IBM appears to be committed to semiconductor research for much longer than that as it seeks to become a leader in creating a new wave of high-end cognitive supercomputers designed to solve the most challenging problems from health care to urban traffic woes.

That's because IBM will need to invent new types of chips to keep making these supercomputers smarter, faster and more energy efficient.

Today's chips are based on silicon technology, while IBM and others in the industry believe they may be reaching the physical limits of what silicon chips can do.

"We're going to have to go to something other than silicon," Kelly said. "In five years we'd better have the next thing ready to go."

That would be carbon-based chips. The $3 billion that IBM is planning to spend on chip research over five years will go to pushing silicon chips to their limit while also working with new materials such as carbon that may be used for the chips of the future.

But the industry is a long way away from using carbon in full-scale chip production, Kelly said.

"There are huge challenges with it," he said. "Now we have to scale it."

Some of that will involve getting suppliers to come up with new ways to process chips in the manufacturing environment. IBM already spends hundreds of millions of dollars at SUNY Poly working with its manufacturing suppliers on new technologies. That would likely continue in the race to make carbon chips even if IBM ends up outsourcing its manufacturing to a company like GlobalFoundries, which also works at SUNY Poly.

"We hope that many of the (manufacturing) tools will be the same, but there are going to be new and unique tools as well," Kelly said.

lrulison@timesunion.com • 518-454-5504 • @larryrulison