IBM Stops Making Chips

IBM announced that it is exiting the chip manufacturing business with the sale of its existing chip-making unit to GlobalFoundries. The sale will include IBM’s manufacturing plants in East Fishkill, New York, and Essex Junction, Vermont. The word “sale” is used loosely in this case, since IBM is actually giving GlobalFoundries US$1.5 billion to take over the struggling manufacturing.
IBM views itself as a enterprise software and system integration company. Recent initiatives have pumped funding into cloud computing and new-age artificial intelligence solutions, such as the famous Watson project. The company sold its enterprise server business to Lenovo, and the chip business has become increasingly orphaned and overshadowed beneath higher priorities of IBM’s vast high-tech empire. By ditching the chip unit to a company with a tighter focus on the chip manufacturing arena, they place the unit in a better position to succeed with the new generation of mobile and Internet of Things technologies.
Interestingly, IBM does not see the move as an exit from the chip business, only from the headaches of manufacturing. The company will continue to invest in semiconductor research and will presumably license its new chip to other companies, mirroring the model of ARM and the hugely popular RISC chip series.
GlobalFoundries was created in 2008 as a spinoff of AMD with funding from the Advanced Technology Investment Company.