IBM is close to securing a deal to sell its chip manufacturing operation to GlobalFoundries, which currently has a technology joint development project with IBM.
Bloomberg reports that IBM has been trying to sell the business, which is losing $1.5 billion per annum, since last year. It has also sold other unprofitable operations, as it tries to deal with eight consecutive quarters of declining revenue.
GlobalFoundries is the favourite to secure a deal, although there are other candidates including Intel and Taiwan Semiconductor Manufacturing.
Apart from sharing a technology joint development project with IBM, GlobalFoundries also has its own modern manufacturing plant in New York State. In comparison, IBM’s facilities are said to be aging and GlobalFoundries is more interested in IBM’s engineers and intellectual property.
According to Yahoo Finance, control of intellectual property is the most important part of any possible deal. IBM initially asked for $2 billion for the sale, but interested parties suggested they would only pay half that amount.