IBM is rumoured to be on the brink of selling its Power processor manufacturing business.

According to reports in American media outlets, Big Blue is going to offload its entire chip-making arm to California-headquartered GlobalFoundries.

GlobalFoundries was spun out of AMD in 2009 and is owned by the Emirate of Abu Dhabi.

The company may not have been IBM’s first choice of purchaser. There has been speculation that there were attempts to sell its processor division to a buyer in the Far East. The Chinese government approved IBM’s $2.3 billion sale of its Intel-based server business to Lenovo this week.

Whether or not this is true, The Financial Times reported in February that IBM had hired investment firm Goldman Sachs to “explore possibilities” for the division. Last month, a Bloomberg article indicated that a deal was close.

The Albany Business Journal, a publication with a strong local interest in the story as both firms have production plants in the state of New York, reported that the deal was imminent yesterday.

It quoted Lee Conrad, national coordinator for the Alliance@IBM union as saying: “We’ve heard these rumours so many times over the years and they never came to pass, but having said that, there seems to be a change in IBM.”

Conrad cited the company’s decisions to sell its old manufacturing businesses and other assets to boost its stock price.

He said: “Everyone is on pins and needles waiting to see if they have a job if the deal goes through.”