The Wednesday (Aug. 6) announcement comes shortly after John E. Kelly III, the senior executive at IBM's Technology Group, said he was taking back the reins at the microelectronics division. Michel Mayer, who worked as general manager of the microelectronics division for 22 months, is in the process of being reassigned. Mayer was credited with developing IBM's strategic focus on the high-end foundry market, as well as deepening IBM's relationship with Apple Computer.

Though an IBM spokesman said the reassignments of Mayer and Davari were planned and "not unusual," they closely follow the July 17 disclosure of significant losses at IBM Microelectronics in the second quarter, losses that were much higher than expected by financial analysts.

In a conference call, IBM's chief financial officer, John R. Joyce, blamed a portion of the loss on low yields during the rampup phase of IBM's 300mm fab, and lower-than-expected demand from several foundry customers. Joyce said he expected yields to rise, and demand to rebound, in the latter half of the fiscal year.

The technology group lost $111 million on revenue of $896 million in the second quarter, up from an $11 million loss in the first quarter.

Until 2002, the group included IBM's hard disk drive business, which was sold to the Hitachi Group last year. Besides packaging and design services operations, the technology group's revenues mainly derive from semiconductor foundry operations and IC sales to other IBM divisions.

Davari said in his new position that he would coordinate efforts "at the system level, including silicon and software. It gives me a chance to look at the whole thing," he said, including the semiconductors, systems, and software needed for systems coming to market at the end of the decade.

By: DocMemory
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