IBM will be paying a sum of $1.5 billion to Globalfoundries to get rid off its chip business and focus on other areas.
The company announced today that it will hand over its global semiconductor business to Globalfoundries, a privately held firm headed by former Motorola Mobility CEO Sanjay Jha. Interestingly, IBM will pay the firm $1.5 billion over the next three years as part of the transaction.
Globalfoundries will acquire all the associated intellectual property and employees involved in the IBM business across the globe. So far, IBM has parted with most of its hardware businesses including desktop PCs and x86 servers. Now, the latest deal leaves the company with its high-end server business which will be powered by the chips from Globalfoundries for the next 10 years under the licensing agreement between the companies.
IBM fell short of expectations for the latest financial quarter when it announced earnings earlier today, but the company expects that the latest move will allow it to focus on core semiconductor research, cloud, mobile, big data analytics and related systems.