IBM will pay US$1.5bn to offload unprofitable chip-manufacturing unit

20 Oct 2014104 Views

Technology giant IBM is to pay US$1.5bn to offload an unprofitable chip-manufacturing unit to Globalfoundries Inc.

That's according to Bloomberg sources who say that IBM will receive US$200 in assets. That makes the net value of the deal worth US$1.3 billion to Globalfoundries, who will also acquire some engineers and intellectual property.

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While the news has yet to be announced, IBM has said it will make a "major business announcement" today after what has thought to have been months-long negotiating period between both firms. Having been deadlocked on a price – IBM wanted to pay US$1 billion while Globalfoundries sought US$2 billion – it is believed that the multinational computer technology corporation will pay Globalfoundries the US$1.5 billion over three years.

Based in Silicon Valley, Globalfoundries is a full-service semiconductor foundry with a global workforce of 13,000.

Dean is a freelance journalist and editor covering media.