Talks to sell IBM's chip-manufacturing business to Globalfoundries fall apart

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IBM and Globalfoundries have broken off talks to sell Big Blue’s money-losing chip-manufacturing business to the Abu Dhabi-owned firm, according to Bloomberg.

Globalfoundries, owned by an investment arm of the government of Abu Dhabi, reportedly made an offer that IBM rejected because the price was too low, according unnamed sources cited by Bloomberg.

James Sciales, a spokesman for IBM, and Kevin Kimball, a spokesman for Santa Clara, Calif.-based Globalfoundries, both declined to comment to Bloomberg.

IBM’s chip unit is reportedly losing money. That’s not a surprise, considering it lost major game console chip manufacturing deals to Advanced Micro Devices, which spun out Globalfoundries in 2009 as a separate entity.

IBM chief executive Ginni Rometty reportedly wants to hit 2015 earnings targets by selling off less profitable units. Globalfoundries, which has its own plant in New York state, had placed little value on IBM’s factories because they are too old, according to Bloomberg.

IBM recently announced it would invest $3 billion in chip-related research and development, but it could presumably still do that without its own chip-manufacturing division. IBM and Globalfoundries are part of an alliance to develop future chip-making tech.


More information:

International Business Machines Corporation, abbreviated IBM and nicknamed Big Blue (for its official corporate color), is a global technology and innovation company headquartered in the Northeast US. IBM is the largest technology and ... read more »

GlobalFoundaries is the world’s first full-service semiconductor foundry with a truly global footprint. Launched in March 2009, the company has quickly achieved scale as one of the largest foundries in the world, providing a unique c... read more »

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