Monday, October 20, 2014

IBM Exits its Silicon Foundry Business

GLOBALFOUNDRIES plans to acquire IBM's global commercial semiconductor technology business, including intellectual property, world-class technologists and technologies related to IBM Microelectronics.

Under the deal, 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. The transfer includes existing IBM semiconductor manufacturing operations and facilities in East Fishkill, New York and Essex Junction, Vermont.  IBM will pay GLOBALFOUNDRIES $1.5 billion over the next three years.

IBM said the deal enables it to further focus on fundamental semiconductor research and the development of future cloud, mobile, big data analytics, and secure transaction-optimized systems.

Separately, IBM reported disappointing financial results.  Third-quarter 2014 diluted earnings from continuing operations were $3.46 per share, compared with diluted earnings of $3.77 per share in the third-quarter of 2013, a decrease of 8 percent.  Operating (non-GAAP) diluted earnings from continuing operations were $3.68 per share compared with operating diluted earnings of $4.08 per share in the third-quarter of 2013, a decrease of 10 percent. Third-quarter net income from continuing operations was $3.5 billion compared with $4.1 billion in the third-quarter of 2013, a decrease of 17 percent.  Operating (non-GAAP) net income from continuing operations was $3.7 billion, as compared with $4.5 billion in the third-quarter of 2013, a decrease of 18 percent.

“We are disappointed in our performance.  We saw a marked slowdown in September in client buying behavior, and our results also point to the unprecedented pace of change in our industry.  While we did not produce the results we expected to achieve, we again performed well in our strategic growth areas – cloud, data and analytics, security, social and mobile - where we continue to shift our business.  We will accelerate this transformation,” said Ginni Rometty, IBM chairman, president and chief executive officer.

http://www-03.ibm.com/press/us/en/pressrelease/45110.wss

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