Feeds

IBM can't give away its chip business: report

Dangled $1bn before GlobalFoundries, which asked for more

Intelligent flash storage arrays

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. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Spies, avert eyes! Tim Berners-Lee demands a UK digital bill of rights
Lobbies tetchy MPs 'to end indiscriminate online surveillance'
How the FLAC do I tell MP3s from lossless audio?
Can you hear the difference? Can anyone?
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
EU to accuse Ireland of giving Apple an overly peachy tax deal – report
Probe expected to say single-digit rate was unlawful
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
prev story

Whitepapers

A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
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?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.