Categories: Workspace

IBM Considering Sale Of Semiconductor Business – Report

IBM is reportedly considering selling its semiconductor business in what would be a major move for the company.

The computing giant has reportedly called in investment bank Goldman Sachs to advise it on the possibility of a sale, although nothing has been confirmed as yet, sources told the Financial Times.  A deal would see IBM look for a buyer for its manufacturing operations, which requires billions of dollars of capital investment in production and R&D, but retain its chip-design capability and operations.

Silicon foundries have become a specialist business, with even processor designers like AMD leaving them to giants. IBM has a strong and solid expertise here, and getting out would be a major sign that it is refocussing away from hardware and towards services. Instead of a full-scale sale, IBM could also seek to form a joint venture partnership for its semiconductor operations, with Samsung, Intel and TSMC among possible buyers as the cost of building such chips has risen steadily in recent times.

IBM has yet to comment on the reports.

Latest sale

The news comes just a fortnight after IBM announced it plans to sell its low-end x86 server business to Lenovo for $2.3 billion, with the deal also seeing 7,500 IBM workers leave the company for the new owner.

The company also recently announced a cross-licensing agreement deal with Twitter that also saw the social network purchase 900 of IBM’s patents for an undisclosed fee, and according to sources, is also reportedly looking to offload its software-defined networking (SDN) business for as much as $1 billion (£604m).

IBM is renowned as the world’s largest owner of intellectual property, with many of its patents concerning its computing products, including the semiconductor business it is apparently keen to sell.

This series of sales indicates that IBM may be looking to refocus its attentions away from hardware and towards software and services. The company announced last month that it would be investing more than $1 billion into the new IBM Watson Group as it looks to develop a division dedicated solely to the development and commercialisation of cloud-delivered cognitive innovations. It also recently announced that it would be spending $1.2 billion to expand its global cloud computing footprint to 40 data centres worldwide in 15 countries across five continents.

The company’s most recent financial results, released last month, showed a five percent drop in revenues in the fourth quarter, missing its earnings targets for the fourth quarter. IBM also plans to take a restructuring charge of $1 billion (£607 million) in the first quarter of 2014, with reports suggesting that the company may look to shed 15,000 jobs worldwide in order to cut labour costs.

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Mike Moore

Michael Moore joined TechWeek Europe in January 2014 as a trainee before graduating to Reporter later that year. He covers a wide range of topics, including but not limited to mobile devices, wearable tech, the Internet of Things, and financial technology.

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