Breaking News
FONT-SIZE Plus   Neg
Share SHARE

Bloomberg: IBM Nears Deal With Globalfoundries For Chip-making Business

RELATED NEWS
Trade IBM now with 

Technology giant International Business Machines Corp. (IBM: Quote) is nearing a deal with Globalfoundries Inc. for its chip-making business, Bloomberg reported Tuesday, citing people familiar with the matter.

According to the Bloomberg report, Santa Clara, California-based Globalfoundries is primarily interested in acquiring IBM's engineers and intellectual property, rather than its manufacturing facilities that are more than a decade old. The terms of the deal were reportedly not available.

Globalfoundries has its own plant in New York state and a technology joint development project with IBM. The company will reportedly act as a supplier for IBM's microprocessors.

Globalfoundries was created in 2009 by the divestiture of the manufacturing arm of Advanced Micro Devices, Inc. (AMD) and expanded through the acquisition of Singapore's Chartered Semiconductor in 2010. The Emirate of Abu Dhabi is the owner of the company.

Media reports earlier this year indicated that New York-based IBM was exploring a sale of its semiconductor business and hired Goldman Sachs to seek potential buyers as well as assist in the sale process.

According to the media reports, IBM was not fixed to the idea of selling the semiconductor business and would also scout for a suitable partner to form a joint venture to run the business. The business includes the PowerPC lineup that has been used in personal computers, fame machines and other equipment.

Most of the companies are exiting the semiconductor-manufacturing business due to the exorbitant cost of building newer generation of advanced fabrication plants.

There are only a handful of companies are currently in semiconductor manufacturing, such as giants South Korean Samsung Electronics Co., Ltd. (SSNLF), Intel Corp. (INTC) and Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) as well as Globalfoundries. One of these companies are seen ending up as the most likely acquirer of IBM's Semiconductor business.

IBM agreed in January 2014 to sell its x86 server business to Chinese PC maker Lenovo Group Ltd. (LNVGY) for about $2.3 billion in a cash and stock deal. IBM earlier agreed to sell its customer relationship management BPO operations to BPO company Synnex Corp. (SNX).

IBM has been divesting less profitable businesses and expanding into providing software and services. In mid-April, IBM reported a 21 percent decline in profit for the first quarter from last year, hurt by lower revenue and a workforce rebalancing charge.

IBM closed Tuesday's trading at $184.29, down $1.93 or 1.04 percent on a volume of 4.16 million shares.

Register
To receive FREE breaking news email alerts for International Business Machines Corp. and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
A number of major retailers will be open on Thanksgiving for early Black Friday shopping events. Kohl's department stores will kick off Black Friday sales two hours earlier this year, at 6 p.m. Thanksgiving Day, while Macy's, Bon-Ton and Best Buy will open at the same time. J.C. Penney and Sears... Twitter Inc. has replaced its head of product Daniel Graf just six months after luring him over from Google, according to multiple reports. Graf, previously known for his work leading Google Maps, will retain his vice president of product title and work on Twitter's geolocation features, the Wall... LinkedIn Corp., the world's largest online professional network, said Thursday after the markets closed that its third quarter loss widened slightly from last year, as higher costs and expenses more than offset a 45% increase in revenue. However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly revenue.
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.