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Bloomberg: IBM offered Globalfoundries $1B to take chip unit

  • Bloomberg reports IBM offered Globalfoundries $1B in cash to take the company's struggling chip manufacturing unit off its hands, and that Globalfoundries insisted on getting $2B.
  • At issue: The unit is reportedly responsible for up to $1.5B/year in losses to go with its employee obligations, and Globalfoundries is said to assign little value to IBM's fabs. Rather, it's Big Blue's chip engineers and IP that mostly interest the foundry.
  • Bloomberg previously reported IBM's talks with Globalfoundries broke down over price, but didn't state Globalfoundries was looking to be paid for making the acquisition. It added IBM was interested in a JV agreement that would allow it to retain control of chip design and IP development.
  • Analyst Jim McGregor thinks a deal might still happen. "The first rule of negotiating anything is you need to be able to walk away from a deal ... This might just be posturing. You may see this resurrect itself in three to six months."
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Comments (11)
  • alpine
    , contributor
    Comments (1101) | Send Message
     
    Look for the "heat" to be turned on on Ms. Rometty to do the deal, any deal before Q4 ends in Dec. Meantime, I'm certain the likes of SMI from China are hovering around, waiting to pick up this, yet another, crown jewel of USofA. For IBM to do this deal with SMI, Beijing may promise a couple $Bn of new deals so Ms. Rometty can declare she has magically met her 2014 and 2015 EPS goals because of China deals.
    4 Aug, 10:27 PM Reply Like
  • Brian Babylon
    , contributor
    Comments (62) | Send Message
     
    Have you been living in a cave? International deals have been around since the beginning of civilization. Get used to it.
    4 Aug, 11:53 PM Reply Like
  • Lowcarb
    , contributor
    Comments (48) | Send Message
     
    Didn't Bloomberg previously report that GlobalFoundries was offering $1B but that IBM wanted $2B.

     

    Now they are saying that IBM offered to pay $1B but that Global wanted $2B

     

    I guess they got the sign mixed up.

     

    I'll take it for $1B if the offer is still there IBM.
    5 Aug, 12:29 AM Reply Like
  • Vacated
    , contributor
    Comments (38) | Send Message
     
    Another example of how pathetic the current IBM leadership has become. They have systematically starved their core business lines in the name of short term EPS to the point that they will pay suitors to take these businesses off their hands. They should all be RA'd in addition to having a portion of their obscene compensation clawed back.
    5 Aug, 07:38 AM Reply Like
  • Arnold Frisch
    , contributor
    Comments (502) | Send Message
     
    Ha, ha!
    IBM wants to " .... maintain control of chip design and IP development."
    From what I've been hearing from IBM engineers is that they'll walk if some deal doesn't happen - and there is no way they are going to have anything further to do with IBM.
    5 Aug, 08:55 AM Reply Like
  • Shaduc
    , contributor
    Comments (1354) | Send Message
     
    Didn't IBM do chip design and manufacturing in the past? Referring to the Macs before Intel CPUs took over.

     

    Perhaps Gerstner/Palmisano sold that off?
    5 Aug, 09:26 AM Reply Like
  • Shaduc
    , contributor
    Comments (1354) | Send Message
     
    In 2005 Apple announced they would no longer use PowerPC processors in their Apple Macintosh computers, favoring Intel-produced processors instead.

     

    In 2004, Motorola exited the chip manufacturing business by spinning off its semiconductor business as an independent company called Freescale Semiconductor. Around the same time, IBM exited the 32-bit embedded processor market by selling its line of PowerPC products to Applied Micro Circuits Corporation (NASDAQ:AMCC) and focusing on 64-bit chip designs, while maintaining its commitment of PowerPC CPUs toward game machine makers such as Nintendo's GameCube and Wii, Sony's PlayStation 3 and Microsoft's Xbox 360.

     

    http://bit.ly/Hl6pBl

     

    PowerPC is largely based on IBM's earlier POWER instruction set architecture.

     

    PowerPC, as an evolving instruction set, has since 2006 been renamed Power ISA but lives on as a legacy trademark for some implementations of Power Architecture based processors.

     

    The IBM-Freescale alliance was replaced by an open standards body called Power.org. Power.org operates under the governance of the IEEE with IBM continuing to use and evolve the PowerPC processor on game consoles and Freescale Semiconductor focusing solely on embedded devices.

     

    A schematic showing the evolution of the different POWER, PowerPC and Power ISAs
    IBM continues to develop PowerPC microprocessor cores for use in their ASIC offerings. Many high volume applications embed PowerPC cores.

     

    By July 2010, the POWER architecture IBM developed is still very much alive on their server offerings for large businesses and continues to evolve (and current POWER processors implement the full PowerPC instruction set architecture).[3] For example, IBM's servers based on POWER have the highest revenue marketshare (53.9%) among UNIX servers.[4]

     

    The PowerPC specification is now handled by Power.org where IBM, Freescale, and AMCC are members. PowerPC, Cell and POWER processors are now jointly marketed as the Power Architecture. Power.org released a unified ISA, combining POWER and PowerPC ISAs into the new Power ISA v.2.03 specification and a new reference platform for servers called PAPR (Power Architecture Platform Reference)
    5 Aug, 09:34 AM Reply Like
  • delano59
    , contributor
    Comments (96) | Send Message
     
    If IBM wants to pay 1billion to anyone to take over the east fishkill plant, then you employees should step in and take it over.
    Cut your salary in half. Take non taxable stock options equal to the other half of your salary!
    Get going do it, you have a lot of arrangements to make.
    For $ 150 have legal zoom file a sub s corporation for you courageous workers.
    Call the corporation " Working People of America ." That's WPA just like the 1930s.
    IBM must guarantee full transfer of patents to WPA with all rights and guarantees.
    The 1billion will be placed in escrow until all vendors agree to reduce there accounts receivables to 1/2.
    A similar reduction on all loans and mortgages , of 50 percent must be agreed upon and eliminate all interest charges over the 3.50 prime rate.
    The profits cannot pay for 401k nonsense, or costly payroll nonsense. A company will for $1.00 pay everybody on Friday and handle all payroll tax returns.
    The federal government and state government must guarantee all loans outstanding at the 50 percent reduced rate.
    The loss of 3,000 jobs in dutchess county, NY will devastate the property values ,the unemployment resources, the federal and state income , sales and property taxes.
    Talk to me. Talk to the "almost" IBM union guy, he somehow knew the IBM disaster was developing.
    The IBM company has an incubated fertilized mind like a fertilized egg and you can not change there EPS marching orders.
    They do not care when they fire you to travel to India we are hiring there. The IBM hardships are all over the place. IBM sold out to Lenovo , there Chinese. IBM wants to pay the Arabs, Abu Daubi to take over the entire east fishkill plant.
    There nuts!
    Have someone talk to the sales people and look at signed contracts. If the stink, have the plant just make chips foe apple computer and release all the sales structure. Everyone works and helps earn a profit for WPA.
    Bookkeepers , timekeepers weld on the line . Maintenance, carpenters , electricians assemble shipments. No one is a financial efficiency experts. The people you sell to will send people to check , monster and suggest changers.
    Decisions made by workers will has precedence changes that the workers want. A decision that a line worker makes will be followed because they believe in it. Dictators in suits are not allowed.
    Do it...
    5 Aug, 02:49 PM Reply Like
  • delano59
    , contributor
    Comments (96) | Send Message
     
    Excuse the misspelled words and the bad English.
    You get the point.
    5 Aug, 02:53 PM Reply Like
  • delano59
    , contributor
    Comments (96) | Send Message
     
    Excuse the misspelled words and the bad English.
    You get the point.
    5 Aug, 02:53 PM Reply Like
  • delano59
    , contributor
    Comments (96) | Send Message
     
    Excuse the misspelled words and the bad English.
    You get the point.
    5 Aug, 02:53 PM Reply Like
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