IBM To Get Rid Of Semiconductor Business

Chris CrumBusiness

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IBM announced an agreement with Globalfoundaries that will see the latter acquire IBM's commercial semiconductor business, including intellectual property, personnel, and technologies related to IBM Microelectronics.The deal will also see Globalfoundaries become IBM's exclusive server processor semiconductor technology provider for 22 nanometer (nm), 14nm and 10nm semiconductors for the next 10 years.

According to Bloomberg, IBM is paying Globalfoundaries $1.5 billion to take the unprofitable unit off its hands. The cash will be paid over the course of three years.

IBM says the deal enables it to focus on its semiconductor R&D , as well as cloud, mobile, big data, and secure transaction-optimized systems. The company says it continues its previously announced $3 billion investment over five years in semiconductor technology research.

"This acquisition solidifies Globalfoundaries' leadership position in semiconductor technology development and manufacturing,” said Dr. Sanjay Jha, CEO, Globalfoundaries. “We can now offer our customers a broader range of differentiated leading-edge 3D transistor and RF technologies, and we will also improve our design ecosystem to accelerate time-to-revenue for our customers. This acquisition further strengthens advanced manufacturing in the United States, and builds on established relationships in New York and Vermont.”

“The Agreement expands our longstanding collaboration, which began when Globalfoundaries was created in 2009, and reflects our confidence in Globalfoundaries’ capability,” said IBM Senior Vice President & Director of Research Dr. John E. Kelly III. “This acquisition enables IBM to focus on fundamental semiconductor and material science research, development capabilities and expertise in high-value systems, with Globalfoundaries' leadership in advanced technology manufacturing at scale and commitment to delivering future semiconductor technologies. We are grateful for the leadership and investments by the states of New York and Vermont in supporting the semiconductor industry.”

IBM's Tom Rosamillia talks about the agreement more in a blog post.

The deal is subject to regulatory review.

Image via IBM

Chris Crum
Chris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.