WSJ: IBM mulls sale of semiconductor manufacturing ops

|By:, SA News Editor

IBM (IBM) is considering a sale of its semiconductor manufacturing operations, which produces chips for its high-end servers and for external customers, the WSJ reports.

However, IBM would keep its chip-design operations; alternatively, according to an earlier FT article, IBM could keep the whole business and seek a partner with which to create a joint venture. The FT reported about the prospective sale but didn't distinguish between the production and design parts of the division.

There was no word on the value of the business, although Bernstein reckons it earned revenue of $1.75B in 2013 and made $130M in pretax losses.

The reports come after IBM said last month that it had agreed to sell its low-end server division to Lenovo for $2.3B.

Evisioneering analyst Rick Doherty said he'd be "shocked" if IBM did sell the semiconductor operations. "Take away the Silicon part, and IBM may not be the tech giant it is 10 years from now," Doherty said.

However, the business has become a less important part of IBM’s operations in recent years, as the company has expanded its software and services activities.