IBM unveils its next-gen chip that boasts a 200% higher workload capacity

International Business Machines Corp (NYSE: IBM) said on Monday that data centres will soon be able to benefit from its newly designed processor chip with a 200% higher capacity to handle the workload as compared to its predecessor.

Shares of the company remained almost flat in the premarket trading and the price action on market open on Monday has not been too exciting so far either. At £95.63 per share, IBM currently boasts over 30% recovery in the stock market after hitting a year to date low of £72.40 per share in March as the Coronavirus pandemic disrupted operations.

Samsung Electronics will manufacture IBM’s new processor chips

The company is collaborating with Samsung Electronics Co Ltd that will manufacture IBM’s Power10 chips. According to IBM, the new chips are specifically designed for data centres. The American multinational technology company said last week that it had set aside $760 million to expand its footprint in the cloud space via investments in various companies.

Sources also confirmed on Monday that Samsung will use its 7-nm process to manufacture the IBM-designed chips. The technology is similar to what Taiwan Semiconductor Manufacturing Co Ltd uses to manufacture chips for Advanced Micro Devices (AMD).   

AMD and IBM outsource manufacturing of their designed chips to compete with the market dominator, Intel Corp. Intel is the largest supplier of central processors to the worldwide data centres. It is among the last few companies that use their own factories for designing as well as manufacturing of processor chips.  

In a recent announcement, Intel warned that the next generation of its central processor chip is likely to be delayed. This, as per the experts, creates a perfect opportunity for its competitors to grow their market shares.

IBM published its second-quarter earnings report in July

IBM is known for its commitment to high-performance computing systems. The list of top 10 fastest supercomputers in the world currently has three of them using IBM’s CPUs.

As per IBM, Power10 is a state-of-the-art chip that is capable of handling artificial intelligence-related computing tasks at a speed that tops its previous generation by 20 times. International Business Machines Corp published its financial results for the second quarter on 20^th July that topped experts’ forecast for earnings and revenue.

At the time of writing, IBM has a market capitalisation of £85.17 billion and a price to earnings ratio of 14.21.