IBM Set to Hand Over Chip Business to Global Foundries – Could be a Game Changer

Usman Pirzada
Posted Jun 12, 2014
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Alright, this news post is slightly weird. It comes from a very authentic source, but that authentic source quotes an ‘anonymous source’ so I was in a dilemma whether to tag it as a rumor or not. I decided against it but I wold still suggest you treat it with a handy pinch of salt. You might recall that IBM is looking to sell its chip business including the fabs and currently looking for a viable customer? Well, the source of our source (always wanted to say that) states that the lucky winner is Global Foundries.

Global Foundries allegedly buying IBM’s Chip Business for Somewhere around 1 Billion US Dollars

I think a little recap is in order. Basically, IBM is looking to sell its Chip Business, primarily the foundries. IBM has two foundries: one is a 300mm production (currently on 22nm)  facility (Building 323) in East Fishkill New York and an older complex in Burlington, Vermont. Now previously the favorite contender was TSMC, since it has the dough and the motivation to acquire IBM’s fabs. In all honesty Global Foundries (GloFo) was probably the least probable contender with Intel ranking after TSMC. Global Foundries would have ofcourse suffered the most if IBM gave its chip business to another company because it shared R&D with GloFo.

Now it appears that although GloFo is primarily interested in the intellectual property side of things as opposed to the hardware side, IBM is willing to handover the chip business for 2 Billion Dollars. However, Global Foundries is stated to have given a counter offer of $ 1 Billion, which IBM might accept. Now the real question is: what will happen to IBM’s PowerPC family of processors? Though times are hard for chip makers, they still have a significant share in the market. Will they bind GloFo in the same fashion that AMD bound GloFo during its spin off? Because contracts like that very rarely work out. However since we are now entering the realm of sheer speculation, I will end the post. I think its safe to say at the very least that we should be hearing about this soon enough.

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