GLOBALFOUNDRIES to Acquire IBM's Microelectronics Business

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IBM and GLOBALFOUNDRIES today announced that they have signed a Definitive Agreement under which GLOBALFOUNDRIES plans to acquire IBM's global commercial semiconductor technology business, including intellectual property, world-class technologists and technologies related to IBM Microelectronics, subject to completion of applicable regulatory reviews. GLOBALFOUNDRIES will also become IBM's exclusive server processor semiconductor technology provider for 22 nanometer (nm), 14nm and 10nm semiconductors for the next 10 years.
 
They sold their server part to Lenovo and now this. So does IBM just do software and R&D now?
 
Services is the growth focus due to the high margins and not having to handle physical inventory.
 
I don't understand why IBM would pay 1.5b to get rid of their junk. Why not just do the corporate equivalent of dumping it into the lake for free?
 
dr/owned said:
I don't understand why IBM would pay 1.5b to get rid of their junk. Why not just do the corporate equivalent of dumping it into the lake for free?
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I would guess because somebody has to keep building the POWER and z/Architecture processors that power the high-end servers and mainframes they're still selling, and leaving on friendly terms guarantees you high priority for fab time.

They try to spin it like they're a "Software and Services" company, but they still sell lots of hardware. They've just divested the low-margin x86 server business to Lenovo, and then sold the chip fabs so they can contract for whatever capacity they need (instead of bleeding money keeping fabs full with their own chip runs), just like AMD did. They still plan to make lots of hardware; their software and services are incredibly dependent on that fact :D
 
striker444 said:
They sold their server part to Lenovo and now this. So does IBM just do software and R&D now?
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This has been the direction of the company since the late 90's and when it was announced they lost quite a few contracts.

It's about time, im not aware of anymore hardware they actually make now.
 
Trimlock said:
This has been the direction of the company since the late 90's and when it was announced they lost quite a few contracts.

It's about time, im not aware of anymore hardware they actually make now.
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Yeah, you're totally right, IBM doesn't make any hardware anymore :rolleyes:

Unless you're the biggest fish in your pond of specialization, it's hard to make real, consistent money providing data management consulting for companies without providing custom hardware to go with it...otherwise, you can be easily replaced (e.g. HP's falling enterprise sales). It's even harder if you're a jack-of-all-trades house like IBM, where various applications are built atop multiple hardware architectures.

IBM locks people into System/Z or POWER along with their custom software, and thus continue to make a killing. But at the same time, if they ever stopped selling custom hardware, their business would die instantly.
 
Clarification to my post above: they still DESIGN new, unique hardware. They might build it in China like everyone else, but they still design hardware.
 
No surprise here, the race for the fastest chips is stagnating and fab tech is a much more saturated market compared to when IBM was king of the workstation. Now their R&D focus is on software and trying to be the first out of the gate with cognitive computing.
 
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