GlobalFoundries rumoured to be sniffing around IBM's fabs

April 4, 2014 | 10:50

Tags: #fab #fabrication #financial #glofo #plant #rumour #semiconductor

Companies: #globalfoundries #ibm #intel

GlobalFoundries has been named as a possible buyer for IBM's unwanted chip-making facilities, although a deal is not considered imminent thanks to IBM's high asking price.

Once a subsidiary of AMD, GlobalFoundries was created in 2008 as a joint partnership btween AMD and the Advanced Technology Investment Company (ATIC). All AMD production would continue in the fabs it once owned, but AMD would pay GlobalFoundries for the privilege. In 2012, its final financial ties were severed when its spin-off agreed terms to purchase AMD's stake outright. Since then, AMD has continued to use GlobalFoundries thanks largely to pre-signed wafer supply agreements still in place.

IBM, meanwhile, is looking to exit the fabrication business thanks to declining interest in the company's Power architecture for mainstream products. With its fabs sold IBM would, it is claimed, look towards service provision rather than hardware sales for its profit. The news came on the back of IBM's sale of its low-end x86 server division to Lenovo, the Chinese technology giant which also bought the rights to IBM's consumer PC business.

The Wall Street Journal, quoting unnamed sources 'familiar with the matter', claims that talks are in progress for GlobalFoundries to buy the now-unwanted IBM plants. Another company named as a bidder for the facilities is Intel, but with the company having recently opted to abandon a fully-finished fabrication plant due to a lack of demand for its capacity, GlobalFoundries is considered to be in a stronger position.

The WSJ's sources warn that a deal is unlikely to happen imminently, however. IBM is claimed to be looking for at least $2 billion for the facilities, while bidders including GlobalFoundries and Intel have yet to offer substantially more than half that price.

Neither GlobalFoundries nor IBM have commented publicly on the claims.
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