ARMONK, NY -- GlobalFoundries has signed a definitive agreement to acquire IBM's money-losing commercial semiconductor technology business, along with $1.5 billion of Big Blue's cash, the companies announced today.

Under terms of the deal, GlobalFoundries will get intellectual property, technologies and an undisclosed number of staff related to IBM Microelectronics.

The deal is set to close in 2015 and subject to completion of applicable regulatory reviews. GlobalFoundries will also become IBM's exclusive server processor semiconductor technology provider for 22, 14 and 10nm semiconductors for the next 10 years.

In a press release, IBM said that after the sale it would focus on fundamental semiconductor research and the development of future cloud, mobile, big data analytics, and secure transaction-optimized systems. 

IBM had previously announced a $3 billion, five year investment toward semiconductor technology research for computing. GlobalFoundries will gain primary access to that research through joint collaboration at the Colleges of Nanoscale Science and Engineering (CNSE), SUNY Polytechnic Institute, in Albany, NY.

"This acquisition enables IBM to focus on fundamental semiconductor and material science research, development capabilities and expertise in high-value systems," IBM senior vice and director of research Dr. John E. Kelly III said.

The terms include IBM's semiconductor manufacturing operations and facilities in East Fishkill, NY, and Essex Junction, VT, and "substantially all" employees at those factories, GlobalFoundries said.

The decision to sell IBM Microelectronics brings to a close its long history in manufacturing. IBM's exit from the chip business was preceded by the spinoff of its PCB assembly unit in 1994, now Celestica, and the sale of its circuit board fabrication and chip packaging operations to a local investment group in Endicott, NY, in 2002.

IBM lost $700 million on the unit in 2013 and had reported pretax losses of $400 million during the first half of this year.

With the deal, GlobalFoundries becomes holder of one of the largest semiconductor patent portfolios in the world.

"This acquisition solidifies GlobalFoundries' leadership position in semiconductor technology development and manufacturing," said Dr. Sanjay Jha, CEO. "We can now offer our customers a broader range of differentiated leading-edge 3D transistor and RF technologies, and we will also improve our design ecosystem to accelerate time-to-revenue for our customers. This acquisition further strengthens advanced manufacturing in the United States, and builds on established relationships in New York and Vermont."

GlobalFoundries said it plans capital expenditures of approximately $10 billion in 2014-15, the majority in New York. The company was founded in 2009 as a spinoff of Advanced Micro Devices' chip production unit.

• Prev
• Next