Globalfoundries takes over IBM chip division and receives 1.2 billion euros – update

IBM has announced that it will pay Globalfoundries $1.5 billion, converted 1.18 billion euros, to take over its loss-making chip division. Globalfoundries will make Power chips for IBM and may dispose of the intellectual property.

IBM will provide $1.5 billion over three years and will receive $200 million in assets, making the deal worth $1.3 billion, or $1 billion. The amount is to compensate Globalfoundries for taking care of IBM’s chip division, which is currently still suffering large losses. It has also been agreed that intensive cooperation will take place for ten years, whereby Globalfoundries will therefore ensure the supply of chips for the IBM systems and the chip manufacturer will also have access to IBM’s technology and knowledge.

At least that’s what Forbes claims, after an announcement from IBM that a major business announcement is coming Monday. IBM already has a partnership with Globalfoundries and talks about an acquisition are said to have been going on for a long time. A $1 billion fee for the chip division was previously rejected by Globalfoundries, rumored to be. The chip branch of IBM would suffer an annual loss of 1.5 billion dollars, converted 1.18 billion euros. The divestment would be part of a major reorganization that should lead to IBM making more profit in 2015.

Update, 12.50: IBM has confirmed the acquisition. Globalfoundries will be IBM’s exclusive supplier of 22nm, 14nm and 10nm chips. Conversely, IBM is sticking to its $3 billion investment in semiconductor technology over the next five years. Globalfoundries will now partly reap the benefits. The chipmaker is taking over two American semiconductor facilities from IBM, including the staff, except for a team for server chips. IBM’s branch for microelectronics, including, for example, the asics production, will also fall under Globalfoundries.