IBM Disposes Its Chip Manufacturing Unit for $1.5 Billion

IBM Disposes Its Chip Manufacturing Unit for $1.5 Billion

ibm IBM Disposes Its Chip Manufacturing Unit for $1.5 BillionIBM aims to focus its efforts and resources on cloud development, secure transaction-optimized systems, and big data analytics. Thus, it has done a major move that would allow it to do so. The giant semiconductor firm has announced the sale of its global commercial chip making business to its partner Globalfoundries.


The deal would cost a hefty $1.5 billion. As part of the agreement, the company would turnover its microelectronics technology, intellectual property, and technologists to the unit’s acquirer, which will also serve as IBM’s exclusive provider of server processor semiconductor materials, including 22, 14, and 10 nanometer chips within the next 10 years.

Expansion of partnership

In a statement, John Kelly, IBM senior vice president and director of research, said the deal would expand its already longstanding collaboration with Globalfoundries, which was established in 2009. This agreement also indicates its confidence in the capability of its partner.

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In turn, the transaction would enable IBM to shift its focus on its fundamental semiconductor research that is set to continue within a five-year $3 billion investment into more chip development programs.

As stated in the agreement, Globalfoundries would also take primary access to numerous research and patents conducted and developed at the Nanoscale Science and Engineering (CNSE) colleges within  SUNY Polytechnic Institute in Albany, New York.

Stronger startup

Thus, Globalfoundries would take IBM’s customers who have requirements in RF technology and learning-edge 3D transistor systems. Consequently, IBM can also improve its design ecosystem to speed up its time-to-revenue process for its customers.

To date, Globalfoundries is set to retain ‘substantially’ every IBM employee who are with the unit during the business transfer. There is no word yet if it would lay off some staff. There would be a team of semiconductor server group experts who would also remain with IBM.

This deal would make Globalfoundries the biggest semiconductor technology making employer in the country’s northeast region. It can be noted that this sale comes several months following a deal that would make IBM sell Apple Inc’s iOS devices to its business customers.