IBM looks to be in the clear to sell off its ailing chippery division to GlobalFoundries after US regulators gave the deal the nod on Tuesday.
GlobalFoundries was spun off from AMD in 2009 with substantial funding from the Advanced Technology Investment Company, a wholly owned investment vehicle of the government of Abu Dhabi, in the United Arab Emirates.
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As a result, its proposed purchase of Big Blue's semiconductor operations had to pass the scrutiny of the Committee on Foreign Investment in the United States, which weighs the national security implications of overseas investments in US businesses.
Not that GlobalFoundries is putting up a lot of money to take over IBM's chips unit. It's rather the other way around; IBM was so desperate to unload the lossmaking division that it was willing to pay GlobalFoundries $1.5bn to prop up the unit while it tries to make it profitable.
The move will see IBM exit the chip-fabbing business altogether. Its remaining chip design brains have already been shifted out of the Systems & Technology Group to its Research arm.
Big Blue is still investing heavily in chip technology. Last year it said it would invest $3bn in developing materials science that could take semiconductors to seven nanometers and below.
If it does crack that challenge, however, it doesn't plan to fab the chips itself. Operating its own foundries was reportedly costing IBM a billion or two dollars a year, and it's eager to get that red ink off its books.
Shareholders, however, have been less than pleased with IBM's handling of the deal. The City of Sterling Heights Police & Fire Retirement System, a Michigan-based pension fund, has sued IBM for allegedly inflating the value of the chipmaking division ahead of the sale, which the fund claims subsequently caused IBM's stock to tank.
In a statement issued on Tuesday, IBM said it will be glad to have the whole thing behind it.
"This transaction, once final, enables IBM to further focus on systems innovation and fundamental semiconductor research and development to power future cloud, mobile, and big data workloads," the Armonk, New York company said. "GlobalFoundries will have access to the research resulting from this investment through the companies' collaboration with other industry leaders at the Colleges of Nanoscale Science and Engineering, SUNY Polytechnic Institute, in Albany, NY." ®