IBM glut starts Cyrix rumours

The talk is that IBM Microelectronics' sales into the chip market maypush Cyrix closer to a sell-off

Speculation mounted last week that Cyrix is up for sale as more details emerged of IBM Microelectronics' incursions into the company's territory with its own version of the 6x86 chip.

At the same time, sources say AMD's K6 chip, Intel's P54C processor and the Cyrix M2 chip will be formally launched at a forum in San Jose, California, in October.

EDS could broker a Cyrix takeover. A number of senior EDS personnel, including its chief legal officer, have joined Cyrix and EDS manufactures Cyrix PCs in its own factories 20 miles away from the Cyrix HQ. Compaq is understood to be another candidate.

The Texas-based chip company turned in bad results two weeks ago. Sources within Cyrix and at its European distributors have blamed IBM Microelectronics for flooding the market with 6x86 chips, forcing down the price. A Cyrix insider said: 'Every company is for sale if the price is right.'

He said IBM Microelectronics, which uses agent Blue Micro in the UK to sell the processor, was more focused on users than indirect channels.

'It takes a customer rather than a distributor viewpoint,' he said. The IBM PC Company refuses to use IBM Microelectronics' 6x86 chips in its PCs. A representative said that was because 'Intel gave better price/performance'.

That was disputed by the source at Cyrix who claimed its chip exceeds Intel's in both price and performance. 'The issue is more one of politics,' he said.

A representative at IBM Microelectronics' HQ in Paris said: 'We are not here to put Cyrix out of business. We don't want to put the mockers on them.' He said IBM Microelectronics had distributors on the continent, but that it used Blue Micro as well as its own direct sales force in the UK.