{"id":15899,"date":"2014-11-05T19:25:37","date_gmt":"2014-11-06T00:25:37","guid":{"rendered":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2014\/11\/globalfoundries-acquires-ibm-microchip-fabrication-business-in-15-billion-deal.html"},"modified":"2014-11-05T19:25:37","modified_gmt":"2014-11-06T00:25:37","slug":"globalfoundries-acquires-ibm-microchip-fabrication-business-in-15-billion-deal","status":"publish","type":"post","link":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2014\/11\/globalfoundries-acquires-ibm-microchip-fabrication-business-in-15-billion-deal\/","title":{"rendered":"GlobalFoundries Acquires IBM Microchip Fabrication Business In $1.5 Billion Deal"},"content":{"rendered":"
\n
\"rsz_global-ibm.jpg\"\n<\/div>\n
IBM researcher Jerry Chow works on semiconductor materials at one of the plants acquired by GlobalFoundries in a move that strengthens the latter’s presence in the Northeast\n<\/div>\n<\/div>\n

IBM and GlobalFoundries in late October
\nannounced an agreement under which GlobalFoundries
\nplans to acquire IBM’s global
\ncommercial semiconductor technology
\nbusiness, including intellectual property,
\ntechnologists and technologies related to
\nIBM Microelectronics, subject to completion
\nof applicable regulatory reviews.<\/p>\n

IBM is paying $1.5 billion to GlobalFoundries
\nin order to get rid of its chip division.<\/p>\n

GlobalFoundries will also become IBM’s
\nexclusive server processor semiconductor
\ntechnology provider for 22 nanometer
\n(nm), 14nm and 10nm semiconductors for
\nthe next 10 years, IBM officials said in a
\nnews release.<\/p>\n

The agreement, once closed, enables
\nIBM to further focus on fundamental semiconductor
\nresearch and the development
\nof future cloud, mobile, big data analytics,
\nand secure transaction-optimized systems,
\nthe company said. IBM continues its previously
\nannounced $3 billion investment over
\nfive years for semiconductor technology
\nresearch to lead in the next generation of
\ncomputing.<\/p>\n

Officials said GlobalFoundries will have
\nprimary access to the research that results
\nfrom this investment through joint collaboration
\nat the Colleges of Nanoscale
\nScience and Engineering, SUNY Polytechnic
\nInstitute in Albany.<\/p>\n

As part of this agreement, GlobalFoundries
\nwill gain substantial intellectual property
\nincluding thousands of patents, making
\nGlobalFoundries the holder of one of the
\nlargest semiconductor patent portfolios in
\nthe world. Officials said GlobalFoundries
\nalso will benefit from an influx of one of
\nthe best technical teams in the semiconductor
\nindustry, which will solidify its path
\nto advanced process geometries at 10nm
\nand below.<\/p>\n

Additionally, the acquisition opens up
\nbusiness opportunities in industry-leading
\nradio frequency (RF) and specialty technologies
\nand ASIC design capabilities, said
\nIBM.<\/p>\n

“This acquisition solidifies Global-
\nFoundries’ leadership position in semiconductor
\ntechnology development and
\nmanufacturing,” said Dr. Sanjay Jha, CEO
\nof GlobalFoundries. “We can now offer our customers a broader range of differentiated
\nleading-edge 3D transistor and RF technologies,
\nand we will also improve our design
\necosystem to accelerate time-to-revenue
\nfor our customers. This acquisition further
\nstrengthens advanced manufacturing in the
\nUnited States, and builds on established
\nrelationships in New York and Vermont.”<\/p>\n

“The agreement expands our longstanding
\ncollaboration, which began when Global-
\nFoundries was created in 2009, and reflects
\nour confidence in GlobalFoundries’ capability,”
\nsaid IBM Senior Vice President and
\nDirector of Research Dr. John E. Kelly III.<\/p>\n

“This acquisition enables IBM to focus on
\nfundamental semiconductor and material
\nscience research, development capabilities
\nand expertise in high-value systems, with
\nGlobalFoundries’ leadership in advanced
\ntechnology manufacturing at scale and
\ncommitment to delivering future semiconductor
\ntechnologies. We are grateful for the
\nleadership and investments by the states
\nof New York and Vermont in supporting the
\nsemiconductor industry.”<\/p>\n

According to the companies, the acquisition
\nbolsters semiconductor manufacturing
\nand technology development in the United
\nStates. GlobalFoundries has capital expenditure
\nplans of approximately $10 billion in
\n2014-2015, with the majority being invested
\nin New York. GlobalFoundries has created
\nnearly 3,000 direct jobs in New York and
\nthousands more indirect jobs in the United
\nStates since 2009.<\/p>\n

GlobalFoundries will acquire and operate
\nexisting IBM semiconductor manufacturing
\noperations and facilities in East Fishkill,
\nN.Y., and Essex Junction, Vt., adding capacity
\nto serve its customers and thousands of
\njobs to GlobalFoundries’ workforce.<\/p>\n

GlobalFoundries said it plans to provide
\nemployment opportunities for substantially
\nall IBM employees at the two facilities who
\nare part of the transferred businesses,
\nexcept for a team of semiconductor server
\ngroup employees who will remain with IBM.<\/p>\n

After the close of the transaction, Global-
\nFoundries will be the largest semiconductor
\ntechnology manufacturing employer in the
\nNortheast.<\/p>\n

GlobalFoundries will also acquire IBM’s commercial microelectronics business,
\nwhich includes ASIC and specialty foundry,
\nmanufacturing and related operations and
\nsales. GlobalFoundries said it plans to invest
\nto grow these businesses.<\/p>\n

IBM said it will reflect a pre-tax charge
\nof $4.7 billion in its financial results for the
\nthird quarter of 2014, which includes an asset
\nimpairment, estimated costs to sell the
\nIBM microelectronics business, and cash
\nconsideration to GlobalFoundries. The cash
\nconsideration of $1.5 billion is expected to
\nbe paid to GlobalFoundries by IBM over the
\nnext three years. The cash consideration
\nwill be adjusted by the amount of working
\ncapital which is estimated to be $200
\nmillion.<\/p>\n

Photo Courtesy Newscom<\/p>\n","protected":false},"excerpt":{"rendered":"

IBM researcher Jerry Chow works on semiconductor materials at one of the plants acquired by GlobalFoundries in a move that strengthens the latter’s presence in the Northeast IBM and GlobalFoundries in late October announced an agreement under which GlobalFoundries…<\/p>\n","protected":false},"author":121,"featured_media":20495,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[57],"class_list":["post-15899","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-news","tag-business-news"],"yoast_head":"\r\nGlobalFoundries Acquires IBM Microchip Fabrication Business In $1.5 Billion Deal - Saratoga Business Journal<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2014\/11\/globalfoundries-acquires-ibm-microchip-fabrication-business-in-15-billion-deal\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"GlobalFoundries Acquires IBM Microchip Fabrication Business In $1.5 Billion Deal - 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