Bloomberg reported Sunday night that IBM has agreed to pay GlobalFoundries, Inc. $1.5 billion to take its unprofitable chip business off its hands, citing “two people with knowledge of the matter.”
The news would end months of speculation that IBM was getting out of the chip business, including its plant in Essex Junction. Bloomberg reported previously that IBM was losing as much as $1.5 billion every year on its semiconductor business.
The Bloomberg report on Sunday had no news specifically regarding the Vermont plant, but previous stories have said that the Abu Dhabi-based GlobalFoundries is interested in IBM’s technical expertise but not its physical facilities.
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GlobalFoundries has built its own state-of-the-art chip fabrication plant, or “fab” in the Saratoga County town of Malta, N.Y., spending more than $8 billion. The company has said it needs to hire 400 more employees for Fab 8, as the plant is known. GlobalFoundries recently opened a recruiting office in Williston, and has already hired away IBM engineers and executives for the fab in Malta.
IBM said Sunday it would make a “major business announcement” Monday at 7 a.m., presumably the sale of its chip business to GlobalFoundries, and separately release its third quarter 2014 earnings results.
Vermont political and business leaders have been following the news of the purported takeover of IBM’s chip business by GlobalFoundries closely because the Essex Junction fab employs about 4,000 people and is a major contributor to the state economy.
Gov. Peter Shumlin will hold a news conference 9:30 a.m. Monday at the BGIC and Lake Champlain Regional Chamber of Commerce at 60 Main St. in Burlington.
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