TMCnet News
Sweet deal for GlobalFoundries and Mubadala [Saudi Gazette, The](Saudi Gazette, The Via Acquire Media NewsEdge) On Monday it was announced that IBM is paying GlobalFoundries $1.5 billion to acquire IBM's global commercial semiconductor technology business, including intellectual property, world-class technologists and technologies related to IBM Microelectronics. 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 deal is unusual and IBM had hoped to sell its chip business. However, IBM's semiconductor group lost $700 million last year and the volume of chips it sells has continued to decline. This has put a financial drain on the company with no hope of recovery. Under the deal, IBM gets the chips it needs without the continuing financial impact. The acquisition is a win for GlobalFoundries and for Abu Dhabi. GlobalFoundries is 100 percent owned by Mubadala Development Company, Abu Dhabi's sovereign wealth fund. Its mandate is the economic diversification of the Emirate. Mubadala's portfolio is valued at more than $60.93 billion. Created in 2009, GlobalFoundries has grown to become the second largest manufacturer of integrated circuits by revenue in the world. It already has eight fabrication facilities, and the acquisition will add two more. The company's goal is to become the world's first truly global semiconductor manufacturing company, bringing advanced technologies to market in high volumes - and in the semiconductor industry volume is the key to profitability. That's what makes IBM's patents and trained manpower of interest to GlobalFoundries. As part of this acquisition, GlobalFoundries will gain substantial intellectual property including thousands of patents, making GlobalFoundries the holder of one of the largest semiconductor patent portfolios in the world; able to serve a wide variety of clients. Plus, GlobalFoundries will benefit from an influx of one of the best technical teams in the semiconductor industry, which will solidify its path to manufacturing advanced process geometries at 10nm and below. Also, under the agreement, GlobalFoundries will acquire IBM's commercial microelectronics business, which includes ASIC and specialty foundry, manufacturing and related operations and sales. GlobalFoundries plans to invest to grow these businesses. IBM stated that it will continue to invest $3 billion over five years for semiconductor technology research to lead in the next generation of computing. Under the acquisition agreement GlobalFoundries will have primary access to the research that results from this investment through joint collaboration at the Colleges of Nanoscale Science and Engineering (CNSE), SUNY Polytechnic Institute, in Albany, N.Y. The acquisition bolsters semiconductor manufacturing and technology development in the United States. GlobalFoundries has capital expenditure plans of approximately $10 billion in 2014-2015, with the majority being invested in New York. After the acquisition, existing IBM semiconductor manufacturing operations and facilities in East Fishkill, New York and Essex Junction, Vermont, as well as all the associated workforce, except a small team of researchers, will transfer to GlobalFoundries. (c) 2014 The Saudi Gazette. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info). |