Reports: IBM explores sale of semiconductor business

The company is said to be mulling a semiconductor joint venture as an alternative

IBM is exploring the sale of its semiconductor unit shortly after agreeing to sell its low-end server business to Lenovo Group, according to newspaper reports.

The company is said to have appointed investment bank, Goldman Sachs, to sound out potential buyers, but could also seek to set up a semiconductor joint venture, The Financial Times reported.

The semiconductor business is described as the company's most technology intensive, and contributes technologies for some key initiatives including the Watson cognitive computing system and high-end servers.

IBM plans to retain its chip-design capabilities while selling the manufacturing operation, The Wall Street Journal reported.

The company said in January it had entered into an agreement to sell its x86 server hardware business and related maintenance services business to Lenovo for $US2.3 billion. The company is also reported to have approached other vendors to check their interest in acquiring its software defined networking business.

IBM could not be immediately reached for comment on the reports on its plans for the semiconductor business.

Besides designing chips based on the Power Architecture for use in its own systems, IBM Microelectronics offers design and foundry services, through which it manufactures chips around Power for other companies. It licensed in October a range of ARM Cortex processors from ARM Holdings to be used in custom chips for networking and communications.

In the fourth quarter of 2013, revenue from IBM's microelectronics business with third parties decreased by 33 percent compared to the same period in the previous year.

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John Ribeiro

IDG News Service
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