IBM will pay GlobalFoundries US$1.5 billion over the next three years for the Mubadala-owned company to take on its floundering microelectronics business.
IBM is shedding the unit to focus on the development of cloud computing, mobile and big data analytics and semiconductor research in which it has invested $3bn over five years.
GlobalFoundries, which is headquartered in New York, will acquire the intellectual property, engineers and assets related to IBM’s semiconductor business. According to Bloomberg the microelectronics business accounts for less than 2 per cent of IBM’s revenue, while the division loses as much as $1.5bn a year.
IBM’s shares slid by about 8 per cent after the announcement.
“This acquisition solidifies GlobalFoundries’ leadership position in semiconductor technology development and manufacturing,” said Sanjay Jha, the chief executive at GlobalFoundries.
“We can now offer our customers a broader range of differentiated leading-edge 3D transistor and radio frequency technologies.”
GlobalFoundries will become IBM’s exclusive provider for 22-nanometre (nm), 14nm and 10nm semiconductor chips for the next 10 years. These silicon chips are used in a vast array of gadgets from smartphones to sports cars.
“This acquisition enables IBM to focus on fundamental semiconductor and material science research, development capabilities and expertise in high-value systems,” said John Kelly, senior vice president and director of research at IBM.
Earlier this year it was reported that IBM had offered $1bn to persuade GlobalFoundries to take the unit off its hands, but the latter wanted $2bn, enough to offset the division’s losses.
Now GlobalFoundries will acquire and operate existing IBM semiconductor manufacturing operations and facilities in New York and Vermont with plans to keep all employees at the two facilities, except for a team of semiconductor server group employees who will remain with IBM.
The move is set to enhance the semiconductor industry in the US. GlobalFoundries is investing $10bn from 2014-15, mainly to expand its faciltiies in New York, where it has created 3,000 direct jobs.
It is planning to further invest in the new unit it has acquired to grow the business.
Anand Srinivasan, Bloomberg Intelligence senior semiconductor analyst said that for GlobalFoundries the deal expands capacity and cements its position as No 2 behind the global leader in chip manufacturing, Taiwan Semiconductor.
It is positive in terms of product positioning and where GlobalFoundries “wants to be”, he added.
Nord Samuelson, managing director at AlixPartners said that competition for research and development (R&D) in the semiconductor industry was fierce.
“We’re seeing a lot of consolidation in the industry to be able to keep up with R&D, with talent and acquisitions that revolve around IP. It’s consolidating to keep up with high costs,” he said.
IBM reported revenues of $22.4bn for the third quarter of this year, a decline of 4 per cent compared to a year earlier.
“We are disappointed in our performance,” said Ginni Rometty, the chief executive at IBM. “We saw a marked slowdown in September in client buying behaviour and our results also point out the unprecedented pace of change in our industry. While we did not produce the results we expected to achieve, we again performed well in our strategic growth areas – cloud, data and analytics, security, social and mobile – where we continue to shift our business.”
IBM will reflect a pre-tax charge of $4.7bn in its financial results for the third quarter of the year, which includes an asset impairment, estimated costs to sell the IBM microelectronics business and cash consideration to GlobalFoundries.
thamid@thenational.ae
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F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
The specs
Engine: 6.2-litre V8
Transmission: ten-speed
Power: 420bhp
Torque: 624Nm
Price: Dh325,125
On sale: Now
Mountain%20Boy
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MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
TECH%20SPECS%3A%20APPLE%20WATCH%20SE%20(second%20generation)
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If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Day 2, Dubai Test: At a glance
Moment of the day Pakistan’s effort in the field had hints of shambles about it. The wheels were officially off when Wahab Riaz lost his run up and aborted the delivery four times in a row. He re-measured his run, jogged in for two practice goes. Then, when he was finally ready to go, he bailed out again. It was a total cringefest.
Stat of the day – 139.5 Yasir Shah has bowled 139.5 overs in three innings so far in this Test series. Judged by his returns, the workload has not withered him. He has 14 wickets so far, and became history’s first spinner to take five-wickets in an innings in five consecutive Tests. Not bad for someone whose fitness was in question before the series.
The verdict Stranger things have happened, but it is going to take something extraordinary for Pakistan to keep their undefeated record in Test series in the UAE in tact from this position. At least Shan Masood and Sami Aslam have made a positive start to the salvage effort.
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
UAE currency: the story behind the money in your pockets
Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Dr Graham's three goals
Short term
Establish logistics and systems needed to globally deploy vaccines
Intermediate term
Build biomedical workforces in low- and middle-income nations
Long term
A prototype pathogen approach for pandemic preparedness
Day 1 results:
Open Men (bonus points in brackets)
New Zealand 125 (1) beat UAE 111 (3)
India 111 (4) beat Singapore 75 (0)
South Africa 66 (2) beat Sri Lanka 57 (2)
Australia 126 (4) beat Malaysia -16 (0)
Open Women
New Zealand 64 (2) beat South Africa 57 (2)
England 69 (3) beat UAE 63 (1)
Australia 124 (4) beat UAE 23 (0)
New Zealand 74 (2) beat England 55 (2)
Could%20We%20Be%20More
%3Cp%3EArtist%3A%20Kokoroko%3Cbr%3ELabel%3A%20Brownswood%20Recordings%3Cbr%3ERating%3A%203.5%2F5%3C%2Fp%3E%0A
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
A timeline of the Historical Dictionary of the Arabic Language
- 2018: Formal work begins
- November 2021: First 17 volumes launched
- November 2022: Additional 19 volumes released
- October 2023: Another 31 volumes released
- November 2024: All 127 volumes completed
MATCH INFO
Manchester United 6 (McTominay 2', 3'; Fernandes 20', 70' pen; Lindelof 37'; James 65')
Leeds United 2 (Cooper 41'; Dallas 73')
Man of the match: Scott McTominay (Manchester United)