Feeds

IBM can't give away its chip business: report

Dangled $1bn before GlobalFoundries, which asked for more

Internet Security Threat Report 2014

IBM's attempt to offload its chipmaking business to GlobalFoundries saw it dangle a billion dollars in front of the putative purchaser, but that offer was rejected as inadequate.

So says Bloomberg, quoting a “person familiar” with the failed deal.

IBM's chippery chaps make fine product, but not so fine or in sufficient volumes to turn a profit. Big Blue is believed to leak a billion or two dollars each year.

Red ink is obviously unacceptable, but IBM has also given itself an ambitious earnings-per-share target that makes getting out of under performing businesses a very fine idea.

Throw in IBM's long retreat from hardware, most recently marked by the sale of its x86 server business to Lenovo, and the chip business looks ripe for rejection.

GlobalFoundries was touted as a likely destination for IBM's unloved chip biz, but the deal fell through.

Bloomberg says that's because GlobalFoundries wanted $2bn in cash, a sum it deemed sufficient to stem losses while it turned things around.

IBM wasn't willing to dip that far into its pockets to make the deal happen, so everyone retreated to square one. GlobalFoundries carries on as usual. And IBM keeps trying to figure out what to do with an asset it doesn't want, but can't give away. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.