MONTPELIER, Vt. – GlobalFoundries announced Wednesday it had completed its purchase of IBM's microchip plants in Vermont and New York, giving a new lease on life to a big employer in Vermont and New York's Duchess County.
Continue Reading Below
"Today we have significantly enhanced our technology development capabilities and reinforce our long-term commitment to investing in R&D for technology leadership," said Sanjay Jha, chief executive officer of GlobalFoundries.
The announcement came two days after the acquisition won its needed federal approval from the Committee on Foreign Investment in the United States, an inter-agency panel that reviews the national security implications of big commercial transactions. GlobalFoundries is owned by an investment firm in turn owned by the government of Abu Dhabi, capital of the United Arab Emirates.
Vermont Gov. Peter Shumlin said the announcement that the deal had been completed should put to rest uncertainty about the future of one of the state's biggest employers. The now former IBM campus in Essex Junction and Williston employs about 3,000 people, said GlobalFoundries spokesman Jason Gorss.
"For years, questions about the future of the IBM facility have caused anxiety for employees, state officials, community members, and many others," Shumlin said in a statement. "Today we know that a stable and thriving workforce will remain right here in Vermont. I am extremely encouraged that GlobalFoundries has committed to continuing to support and invest in cutting edge technology and the quality workforce we have in Vermont."
Terms of the deal include:
Continue Reading Below
— IBM has agreed to pay GlobalFoundries $1.5 billion over three years to take over its chip-making operations. The money will be used for new investment in plants that Richard Doherty of the tech industry research firm Envisioneering said were no longer "state of the art."
— GlobalFoundries will be the exclusive suppliers of certain classes of chips to IBM for 10 years.
— A promise of stable employment. "We extended job offers to every employee involved in the transaction. We do not expect any workforce reductions associated with the deal at this time," Gorss said in an email.
IBM spokeswoman Lisa Lanspery said GlobalFoundries' takeover of the microchip manufacturing operations will allow Big Blue to focus on research and development of the coming generations of computer chip design.
In a joint research project at the State University of New York Polytechnic Institute's College of Nanoscale Science and Engineering in Albany, the companies are working to develop 10 nanometer and 7 nanometer chips for mobile devices and stationary equipment like servers and printers. A nanometer is one-billionth of a meter. IBM is investing $3 billion in computer chip research in the next five years, Lanspery said.
Jeff Couture, a former spokesman at the IBM Vermont plant who is now executive director of the Vermont Technology Alliance business group, said IBM is effectively "outsourcing their manufacturing." Lanspery said that was an accurate characterization.