A few years ago, the semiconductor industry seemed to be fated for endless growth. Then the economy started to turn downward, leaving many companies struggling to find profits. For many wireless- and radio-frequency-focused companies, the world climate pointed them back to their military roots. As a prime example of this, Raytheon Company, has announced plans with IBM (www.ibm.com) to design custom semiconductors and systems for customers in the aerospace and defense industries.

Through this strategic relationship, Raytheon's expertise in defense-electronics technology and aerospace will merge with IBM's knowledge of complementary areas. Among IBM's specialties are cutting-edge chip design, software development, large-systems computer architecture, and network integration. Raytheon and IBM intend to work together to market the solutions that they design jointly.

The two companies are creating a project office to respond to customer needs. In addition, this office will help them to oversee potential joint projects and contractual engagements. By leveraging this union, Raytheon and IBM plan to create better solutions and improved performance for their customers. They also believe that working cooperatively on existing and new programs will create a foundation for future business. To IBM alone, this contract could be worth as much as $100 million over five years.