Bloomberg: IBM close to selling chip unit to Globalfoundries

|By:, SA News Editor

Bloomberg's report follows an April WSJ report calling Globalfoundries "the lead candidate" to buy IBM's (IBM -0.6%) chip manufacturing/foundry ops. Notably, Globalfoundries is said to be more interested in Big Blue's chip engineers and IP than its relatively old wafer fabs.

A source states the unit has been losing as much as $1.5B/year. Its Q1 sales fell 16% Y/Y amid continued share losses to Globalfoundries, Samsung, and foundry giant TSMC (TSM -0.5%).

Nonetheless, the business claims high-profile foundry clients such as Cisco and Juniper, and has a history of leading the way in mass-producing new chip technologies/materials, such as silicon-on-insulator (SOI) and silicon germanium (SiGe).

That could help Globalfoundries as it tries to gain ground against TSMC, which has a long list of blue-chip mobile processor, GPU, and FPGA clients.

The WSJ's report stated the unit has received $1B+ bids - less than the $2B+ IBM was initially seeking.