IBM resurrects PC-on-a-chip

A lot of companies look to IBM for microprocessors, but arguably none are looking to the company more ardently this month than manufacturers of embedded systems.

That’s because it has agreed to manufacture the ZFx86, a so-called PC-on-a-chip from ZF Micro Solutions of Palo Alto, Calif. Once made under licence from ZF Micro by National Semiconductor, the chip has been off the shelves since 2002, when it became tied up in a legal battle. A reported US$20 million dollar settlement by National at the beginning of the year paved the way for Big Blue to come to ZF Micro’s rescue.

Among those waiting for IBM’s first test wafer to be baked is Doug Stead, president of the Tri-M Group of Calgary, which sells embedded computer systems. The chip was so essential to his sales that when production stopped he borrowed $1 million to buy as many as he could for the systems he builds.

“We just built our last of 500 boards,” he said last month. “So we’re going to run out of product just when the new chips are coming on stream.”

That’s if things go well.

“We’re hoping that by the end of November or the first week of December we’ll have our first chips,” said ZF Micro CEO David Feldman.

Made at IBM’s Burlington, Vt., facility, they’ll be shipped to a San Francisco company for assembly and packaging. Volume production is expected to start in the first quarter next year.

Feldman wouldn’t give details of the IBM deal, other than to say he hopes to buy “thousands of wafers over the next few years.”

“I have people really desperate for chips,” he said, including a company with a U.S. government contract.

All this over a chip that’s hardly leading-edge: It’s based on 80486 technology.

But it has virtues: The CPU comes with a full chipset, ports, a BIOS and what the company calls a FailSafe mechanism for restoring operations after a system failure. It’s perfect for products Stead makes, including ruggedized, low-power desktops for hostile environments and power supplies for trains. Earlier this year he sold 1,000 ZFx86-powered units that run police car transmitters to Turkey.

Stead, who testified for Feldman at the trial, calls the settlement with National a “David and Goliath story.”

For Feldman it’s been a nightmare. National had been building his chips since 1999, but suddenly in 2002 production stopped. His company, which had 27 distributors around the world and 70 employees, shrunk to three workers. He had to sue National. At a trial in 2004, a jury found for National on several points, but on two other awarded ZF Micro US$30 million. That decision was overturned on appeal and a new trial ordered. Instead the parties settled.

Feldman admits it was a “major relief” that IBM will try to make his chip and possibly new generations.

“We need to rebuild our credibility in the marketplace,” he said, “and it’s important IBM has agreed to do this. I don’t think there’s many company’s that don’t trust IBM.”


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