"(Signing with IBM) gives our customers confidence that IDT will have adequate supply to meet their requirements," said Len Perham, IDT's president and CEO.
IDT is a fledgling rival to Intel and its first processor, a Pentium-class chip called C6, shipped about 100,000 units last quarter. IDT's aim is to steal at least 5 per cent of the low-end notebook market.
The three-year deal with IBM will start this Autumn. IBM will build IDT's next-generation processor, the C6+, which was introduced last October. According to IDT, the C6+ will be more powerful than its predecessor and will be particularly suited to 3D graphics due to a set of instructions similar to those on the AMD K6-3D processor.
The C6+, a 5.8 million transistor chip, will be compatible with socket 7, not the Slot 1 architecture which is patented by Intel.
For companies like AMD, which has been plagued by production problems, contracting IBM to make the chips is an assurance that supply of the processors will not dry up. AMD's marketing manager, Richard Baker, has already admitted that production of its K6 has fallen well short of demand, forcing it to turn to IBM.
"IBM has leading-edge technology and a proven track record in producing these types of devices," said Linley Gwennap, editor of the Microprocessor Report, a respected trade journal in the US. But with x86 sales expected to reach 100 million units this year, IBM may be hard-pressed to supply the 25 per cent of the market Intel's three rivals hope to take. AMD, in particular, is already selling every processor it can manufacture, and IBM's priorities may cause problems for IDT. "Someone has to be at the bottom of IBM's list," said Gwennap. With previous obligations to AMD and Cyrix, IBM could have problems meeting orders if demand shot up, he said.
IDT hopes to gain enough cachet to sell up to 2 million processors this year.