IBM reportedly shedding fab arm to GlobalFoundries

October 20, 2014 | 11:23

Tags: #fab #fabrication #glofo #manufacturing #power #power-pc #semiconductor #thinkpad

Companies: #amd #globalfoundries #ibm #lenovo

IBM is reportedly set to pay AMD spin-off GlobalFoundries $1.5 billion to take ownership of its unprofitable processor manufacturing division, marking the biggest milestone in the company's transition away from manufacture into design and services provision.

Once AMD's internal semiconductor fabrication division, finally separated from its former parent back in 2012, GlobalFoundries is said by a pair of anonymous sources speaking to business paper Bloomberg to be receiving $1.5 billion in cash from IBM to take ownership of the company's Power processor manufacturing division. At the same time, GlobalFoundries is said to be transferring $200 million in unspecified assets back to IBM - making the deal in total worth a net $1.3 billion.

The move, if Bloomberg's sources prove reliable, coems on the back of rumours from February that IBM was to exit the processor manufacturing business. In April, GlobalFoundries was named as a potential suitor, although neither company was willing to publicly comment on their plans. If true, it's part of a continued shift for IBM: the company has previously offloaded both its consumer PC and x86 server business to Chinese computing giant Lenovo, which originally partnered with the company to produce IBM's popular ThinkPad range of business laptops.

The deal, Bloomberg's sources claim, will see a ten-year partnership between IBM and GlobalFoundries in which the latter will manufacture any and all Power-architecture processors required by IBM while receiving key access to the company's intellectual property. The $1.5 billion in cash will be spread across the first three years of the deal.

At the time of writing, neither GlobalFoundries nor IBM had commented on Bloomberg's report - although IBM has issued a media advisory stating that it has a 'major business announcement' from chief financial officer Martin Schroeter to make late this evening.
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