Informing the IBM Community

Rumours abound about IBM’s processor sell-off


There has been continued speculation about the future of IBM’s chip-making division in the American press.

Last week, U.S. news agency Bloomberg claimed that Big Blue couldn’t pay to be rid of the unit that produces Power processors. Yesterday, a report in the Poughkeepsie Journal cast doubt about the future of its East Fishkill processor plant in New York state.

On July 25, Bloomberg reported that a proposed sale to GlobalFoundries, which is owned by the Abu Dhabi government, had stalled. IBM had walked away from the negotiating table because GlobalFoundries’ offer for its chip operation was too small.

Last week, however, the same news agency quoted an anonmyous source who said that Big Blue actually offered GlobalFoundries a sweetener deal of about about $1 billion to take the unit off its hands. GlobalFoundries wanted $2 billion, enough to offset the division’s supposed losses.

According to these reports, neither company was willing to comment.

Yesterday’s report in the Poughkeepsie Journal was based on paperwork the newspaper obtained under American freedom of information law.

Whether it amounts to much more than some stringent bean-counting is another matter. IBM apparently wants to pay less if it exits a deal early with the public agencies that provide water to its Town of East Fishkill processor manufacturing plant.

Previously, it would have paid $13.5 million if it exits after one year and $12 million if it leaves after two years, and so on. Now it wants exit fees nearer $3.47 million if it leaves after one year and $3.28 million after two years.

IBM is the county’s largest employer. Last year, the local joint water board approved $19.4 million in upgrades to its infrastructure, partly to address IBM’s insistence that minute levels of urea in the water be decreased.

Unpleasant as this sounds, levels are well below safe drinking-water standards. However, they are apparently high enough to interfere with chip-making processes.

It would seem, though, that local officials are not too keen to fall out with Big Blue.

Poughkeepsie Supervisor Todd Tancredi, who sits on the joint water board that oversees the local water plant in question, said: “IBM is a big part of our area and an important company for the Town of Poughkeepsie and Dutchess County. We clearly want to come up with an agreement that will satisfy their needs.”

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