IBM rumoured to be exiting chip making business

February 7, 2014 // 11 a.m.

Tags: #fab #fabrication #financial #ibm #manufacturing #power #powerpc #ps3 #semiconductor #wii #wii-u #xbox-360

IBM is rumoured to be leaving the semiconductor fabrication business, selling its manufacturing facilities while retaining its design and research divisions.

The news comes courtesy of an unnamed source 'familiar with the matter' speaking to the Wall Street Journal. According to said source, IBM is looking to sell off its fabrication plant in order to concentrate on service provision rather than hardware sales. The rumour spreads on the wings of IBM's recent sale of its low-end x86 server division to Lenovo.

It's been a while since you might describe IBM's chips as 'mainstream,' but they certainly have their markets: Nintendo's Wii U and Wii consoles both use IBM PowerPC processors, but Microsoft's Xbox One and Sony's PS4 have both abandoned the architecture in favour of x86 parts from AMD. Meanwhile, IBM's high-end server and mainframe business is slumping, further harming sales of its PowerPC chips despite their presence in some of the most powerful systems in the world including the world's third-fastest supercomputer Sequoia.

Analysts at Sanford C. Bernstein told the paper that IBM's microelectronics arm is running at an annual loss of around $130 million, and with sales slumping that loss is likely to grow. As a result, a sale - or AMD/GlobalFoundries-style spin-off - of IBM's manufacturing arm seems a sound plan, and could potentially give a shot in the arm to any semiconductor company looking to expand its own facilities quickly and easily. With Intel shrinking, rather than growing, its active facilities, it remains to see who - other than perhaps Samsung - could afford such a purchase, however.

IBM has neither confirmed nor denied the claim.
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