Bloomberg: IBM/Globalfoundries talks break down over price

|By:, SA News Editor

Bloomberg reports IBM's (IBM -0.5%) talks to unload its struggling chip manufacturing unit to Globalfoundries have ended over differences on price.

The news service reported in June IBM and Globalfoundries were close to a deal, while adding (citing a source) Big Blue's chip unit has been losing as much as $1.5B/year. Before that, the WSJ reported IBM originally wanted $2B+ for the business, but had seen initial bids closer to $1B.

The unit's sales fell 18% Y/Y in Q2 amid ongoing share losses to TSMC and other foundry rivals. They fell 16% in Q1, and 33% in Q4.

Bloomberg states IBM had become interested in a JV arrangement that would allow it to maintain control of chip design and IP development (while ridding itself of manufacturing). Two weeks ago, IBM promised to spend $3B over the next 5 years on advanced chip R&D.