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IBM’s Chip-Making Business Is Doing So Poorly, It Wanted To Pay $1 Billion To Get Rid Of It
IBM’s chip-manufacturing unit has been struggling so poorly in recent years that Big Blue was willing to pay up to $1 billion to get rid of it, Bloomberg reported Monday.
According to the report, IBM had offered GlobalFoundries $1 billion in cash to take over its chip-making business, but the deal fell through when GlobalFoundries asked for $2 billion instead.
Earlier reports had indicated that it was the other way around, with GlobalFoundries offering $1 billion to buy the business.
The chip-manufacturing unit is a cash-bleeding business for IBM, having lost roughly $1.5 billion last year, according to Bloomberg. It recently lost deals to produce chips for Sony and Microsoft’s video game consoles, and is seeing less demand from IBM as the company is shifting its focus away from servers, reports the Wall Street Journal.
GlobalFoundries is reported to have almost no interest in IBM’s aging facilities. The deal is more about acquiring IBM’s talent and intellectual properties, the report said.
IBM’s CEO Ginni Rometty has been focused on restructuring the entire organization after posting losses for nine consecutive quarters. It sold its low-end server business for $2.3 billion to Lenovo earlier this year, and is in the process of laying off 13,000 employees worldwide.
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