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Inspur, IBM to Form Server Production and Sales JV

Inspur Electronic Information, 9/11/17

Computer and communications hardware and software manufacturer Inspur Electronic Information Industry (000977.SZ) recently announced that it has signed an agreement with US technology firm IBM's China branch to form a joint venture covering the manufacture and sale of servers.

Inspur said that the deal will enable the company to manufacture and sell servers based on IBM's "POWER" series of performance microprocessors, and round out its server ecosystem to establish a sustainable server business and provide users with advanced, diversified information products and solutions.

The JV, Langchao Shangyong Jiqi ("Inspur Business Machines"), has total registered capital of RMB 1 bln, with Inspur investing RMB 510 mln for a 51% equity stake, and IBM investing RMB 490 mln for the remaining 49% equity stake.

Editor's Note: In an e-mail exchange with Marbridge, a representative of IBM Greater China's corporate communications team emphasized that the new JV represents a continued investment in the POWER line, rather than a divestment. Whereas IBM divested its X86 line of servers to Lenovo several years ago because of commoditization of that market sector, IBM continues to invest in the more performant line of POWER servers, both in China and globally. POWER-based computing platforms in particular allow companies to take advantage of advanced data and analytics capabilities that are the basis of competitive advantage in today’s markets. The POWER CPU is more performant for analytics, and servers can be configured with integrated GPUs to accelerate parallel processing and graphics analysis.

Keywords: processor computer hardware server IBM JV Inspur Electronic Information Industry 000977.SZ

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