‘Imminent’ IBM group sale to GlobalFoundries falls through, according to rumor mill

The rumored deal between IBM and chip-making rival GlobalFoundries could be off, industry observers say.

[email protected], the unofficial union for the tech giant, issued an unconfirmed report Tuesday afternoon that a company executive made the announcement to managers at IBM’s East Fishkill, New York, facility.

Lee Conrad said the group received the update by email, and he had no further information. Mike Cadigan, the executive named, and other IBM representatives could not be reached for comment.

International Business Machines Inc. is said to have been in negotiations to sell its computer chip manufacturing division to GlobalFoundries, the world’s second-largest semiconductor manufacturer. The subsidiary of Mubadala Technology, a multi-sector corporate network, is wholly owned by the Emirate of Abu Dhabi.

Neither IBM nor GlobalFoundries has confirmed or denied gossip about the pending deal, but related reports have persisted for weeks in the national financial media.

Suspicion that GlobalFoundries would be more interested in the chip-making division’s intellectual property than its physical manufacturing plants fueled concern in Vermont, where IBM is the state’s largest private employer with more than 4,000 workers.

Scuttlebutt about the deal falling through was accompanied Tuesday by an official announcement by New York Gov. Andrew Cuomo regarding a new Electronics Manufacturing Consortium.

The initiative, led by General Electric, will develop the next generation of materials used on semiconductors at the state-owned research and development facility in Albany, according to a news release. It will be managed through newly merged SUNY College of Nanoscale Science and Engineering and the SUNY Institute of Technology.

More than 100 private companies are involved. The public-private partnership will invest about $500 million, the release said.

IBM and GlobalFoundries are heavily invested in technology development in the Albany area. However, the role of both companies in the consortium — if any — remains unclear.

IBM announced July 10 it would invest $3 billion in its chip technology, but little or none of that windfall is likely to reach the company’s plant in Essex Junction.

Hilary Niles

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