Skip to comments.Globalfoundries Emerges as Lead Candidate to Buy IBM Chip Plants, Sources Say -- Update
Posted on 04/04/2014 10:56:43 AM PDT by Straight Vermonter
Globalfoundries Inc. has emerged as the lead candidate to buy International Business Machines Corp.'s semiconductor manufacturing operations, people familiar with the matter said.
IBM has also held talks with chip makers Intel Corp. and Taiwan Semiconductor Manufacturing Co., these people said. TSMC has dropped out of the talks, the people said. Intel is still involved, but Globalfoundries appears to have a stronger interest, these people said.
Talks between IBM and Globalfoundries are ongoing and a deal isn't imminent, these people said. The transaction involves thorny issues, including control of intellectual property and terms under which the ultimate buyer of the facilities may keep manufacturing chips for IBM computers, they added.
Representatives from IBM, Globalfoundries and Intel declined to comment.
A sale of the chip-manufacturing operations, if completed, would represent IBM's most significant strategic shift since the company got out of the PC business in 2004.
IBM has repeatedly exited low-margin businesses where it couldn't find a competitive edge, like PCs. Chip manufacturing, by contrast, is a field involving fundamental research and development, a longtime foundation for IBM hardware that has also helped drive innovation in the broader semiconductor industry.
IBM factories make computer chips for its own high-end server systems as well as for external customers. Shedding those capital-intensive operations could help boost IBM's profitability, and dovetail with recent moves by the company to reduce its reliance on selling computer hardware.
IBM wants to maintain control over as much semiconductor research and development as possible, but Globalfoundries is also interested in gaining more ownership of that expertise and intellectual property, said the people. As part of the deal, Globalfoundries also wants to secure an agreement to be IBM's main chip supplier, but IBM has concerns over whether the company can be a reliable supplier, said the people.
(Excerpt) Read more at online.wsj.com ...
Is GlobalFoundries, Chinese? or Chinese owned?
Whatever it is, they should make cast iron, bullet-proof chips, right?
It's owned by the government of Abu Dhabi.
The Chinese already have a major ownership interest in IBM. Red China has been buying premium assets in the west for many years. China has liquidated a lot of those US bonds they had and used the cash to buy good stuff that has value and companies that had great patent collections. When the Japanese had a lot of our dollars, they blew it on golf courses and Hollywood studios and music companies. The Chinese are way better asset buyers.
...........There is a LOT of trepidation about what the future holds for us...............
Go out now and buy your headscarf before they run out.
“Semiconductor manufacturing and Steam Boilers”
Wondering that myself.
Crony capitalism sucks.
If they want to get out of selling computer hardware what do they have left? Calculators? Cash registers?
Sorry to hear that Straight Vermonter.
> As part of the deal, Globalfoundries also wants to secure an agreement to be IBM’s main chip supplier, but IBM has concerns over whether the company can be a reliable supplier...
What’s that say about IBM’s relationship with its current customers?
The AMD / GF / IBM story is finally coming to an end.
It is a story of over hyped product and under delivery which began with PowerPC and will end with the death of AMD in 2-4 years.
It is always good to have a fall-back position, in case the new gig doesn't work out.
You know, "Don't quit your DayJob!"
Hardware is currently only about 17% of IBM's sales. It has become a software and services company.
Whats that say about IBMs relationship with its current customers?
Yeah that sounds odd. I think what they mean to say is that currently the 300mm plant exists primarily to serve IBM's server group. If GF buys the fab there is no way for IBM to ensure that their orders will still be top priority.
That is reality, and there is nothing IBM can do about it if they sell the business. Typical of management-by-spoiled-children, they want it both ways. If they want the cash to do other things, they might as well dump the server business too, or the mainframes, or...
Yeah, services was what I was going to say. Kind of a data management specialization - big data.
Better yet buy a Bible
That wouls be The United Arab Emirates
“When the Japanese had a lot of our dollars, they blew it on golf courses and Hollywood studios and music companies. “
The Japanese were enamored with the same pop culture that has been so harmful to the many in America, and profitable to the few in Hollywood. The Chinese are apparently not that gullible.
Every corporation has stakeholders such as communities, employees, shareholders, country, senior management, and suppliers, retirees, and secondary businesses.
We foolishly forget that sometimes. Employees often have the biggest relative stake because time as in decades and career is not retrievable or refundable, and represents a significant investment. Good luck.
“Ran across this, it’s old but...Chip plant to hide use of taxpayer funds $650M “
Crony capitalism at its finest. Money from the USA taxpayer saps who don’t even get interest payments from an off shore job creator.
It is unfortunate for us that our politicians are under the thumb of these businesses, and spend our money as risk capital, without taxpayers even getting a risk premium or cut of the action as do the venture capitalists. We need to see heads roll.
Not exactly. The UAE is made up of 7 emirates. Abu Dhabi is one of them. Somewhat like a state government vs federal government in the US.
It’s infuriating at the least. All the self-serving freaks on Capitol Hill coming in at $174,000+/year yet retire as multi-millionares? Makes me dizzy just thinking about all the fraud and waste and endless excesses lavished upon themselves,especially with so many on shoestring budgets out here.
We had some at a place I used to work at, a major supplier to Boeing.
Came within a day or two of shutting-down the 777 assembly line at one point.
How much is it being sold for?
IBM is reported to be asking for $2B and GF is reported to be interested at a little over $1B.
That’s an awfully big spread.
AMD originally sold less that an controlling interest in its Fabs in Dresden, Germany to Global Foundries. The stockholders after the sale were AMD and The Advanced Technology Investment Company (ATIC) which was a technology investment company wholly owned by the Government of Abu Dhabi.
Later ATIC obtained full ownership of GlobalFoundries and at that point GlobalFoundries became a subsidiary of Mubadala which is Abu Dhabi’s investment vehicle. GlobalFoundries also built a Fab in the Luther Forrest, NY that originally was the brainchild of Hector Ruiz, AMD’s previous CEO. Abu Dhabi is said to be the richest city in the world.
Doesn't really matter though both are very very wealthy and have claimed to e gateway to the middle east and the east. That is true. Any company worth a damn has ofices in Dubai and a facility in Jebel Ali
Iran hates and covets both.
Corrupt politicians will inevitably create a corrupt country... be it the USA, Russia or Mexico.
We must see corrupt politicians, regardless of their politics, ensnared, prosecuted and punished by non-partisan patriots before they can turn our nation into trash.