IBM has signed a deal that will see Globalfoundries take over its chip-making business.
IBM will pay Globalfoundries $1.5bn to take on the semiconductor unit – equivalent to the division’s estimated annual loss.
Rumours of a deal between the two firms began two months ago when Globalfoundries was understood to be more interested in acquiring IBM’s engineers and IP than its manufacturing facilities.
The expected announcement follows reports that a $1bn deal between the companies fell apart over summer.
IBM announces its third-quarter earnings at 7am US eastern time – 12pm GMT.
Globalfoundries is positioned to become IBM’s main chip supplier for microprocessors thanks to the deal. It has fabrication plants in Germany, Singapore, China, Taiwan, Japan and the US.
IBM decided to sell off its chip-making unit because of intense market price competition and increasing manufacturing and R&D costs associate with microprocessor innovation.
