IBM Sells Microelectronics Business To Globalfoundries

IBM said it will sell its global semiconductor technology business to Globalfoundries allowing the company to focus on fundamental chip research and systems innovation. Under terms of the deal announced Monday, IBM will pay $1.5 billion in cash to Globalfoundries over the next three years and will also reflect a precash tax charge of $4.7 billion in its financial results for the third quarter. That includes an asset impairment, estimated costs to sell the microelectronics unit and cash to Globalfoundries. The deal also stipulates that Globalfoundries will become IBM's exclusive server processor and semiconductor technology provider for 22, 14 and 10 nanometer semiconductors for the next 10 years. Shares of IBM rose 1% in thin, premarket trading.