GlobalFoundries completes IBM chip acquisition

GlobalFoundries, the once-and-former fabrication division of AMD, has officially completed its acquisition of IBM's chip business, adding more than 16,000 patents to its portfolio along with two new fabs.

First rumoured back in April 2014, the deal between GlobalFoundries and IBM appears at first glance to be backwards: as well as handing over its patent portfolio, fabrication plants and staff to GlobalFoundries, IBM is paying the company $1.5 billion in cash and investing a further $3 billion over the next five years simply to get rid of a division which has been running at a considerable loss for quite some time. As a result of the deal, GlobalFoundries - set up when AMD made the move to becoming a fabless semiconductor company and now entirely separate from its parent - becomes both well-funded and patent-rich.

'Today we have significantly enhanced our technology development capabilities and reinforce our long-term commitment to investing in R&D for technology leadership,' claimed Sanjay Jha, chief executive officer of GlobalFoundries, at the closure of the deal. 'We have added world-class technologists and differentiated technologies, such as RF [radio frequency] and ASIC [application-specific integrated circuit], to meet our customers’ needs and accelerate our progress toward becoming a foundry powerhouse.'

As part of the deal GlobalFoundries becomes the owner of IBM's 16,000-strong microelectronics portfolio, making it one of the largest IP holders in the semiconductor industry. The company also takes over IBM's manufacturing plants in East Fishkill, New York and Essex Junction, Vermont, which it says it will continue to run in order to boost its own production rates. In exchange for the cash, patents and facilities, GlobalFoundries has agreed to continue to supply IBM with semiconductors for at least the next ten years, while IBM will provide GlobalFoundries with the results of its ongoing $3 billion investment in semiconductor research and development over the next five years.

'This is big for our industry. The combination of GlobalFoundries manufacturing capabilities and IBM process technology expertise and innovation significantly strengthens the foundry landscape,' AMD president and chief executive Lisa Su claimed of her company's estranged child, which it still relies upon for chip fabrication, 'and will help provide AMD with the leading edge technologies required to deliver our next generation of winning products.'