IBM clinches $100m chip design contract

CIOL Bureau
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NEW YORK: IBM’s chip design and engineering services group has signed a five-year deal with defense company Raytheon Co., a deal that it said to be worth up to $100 million.

The design group was created last fall as part of Armonk, New York IBM's technology division, which also makes microchips for itself and outside companies. The technology group, which has been closely scrutinized by investors, posted a loss during the second quarter.

IBM and Raytheon said in a joint statement that they will create a project office in Lexington, Massachusetts where Raytheon is based. The office, which will include engineers from both companies, will oversee potential joint projects and contracts.

IBM said that it is already engaged in several custom component projects for Raytheon.