1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites

IBM eyes sale of chip division

February 7, 2014

US technology giant IBM is reportedly seeking a buyer for its chip division. According to British business daily Financial Times, the disposal would amount to the firm’s biggest strategic realignment in two decades.

https://p.dw.com/p/1B4eq
Prozessor Penryn
Image: picture-alliance/dpa

US technology firm IBM had appointed investment bank Goldman Sachs to explore possible buyers for its semiconductor business, the Financial Times reported Friday.

Quoting unidentified people familiar with the matter, the British business daily also said that IBM was also considering a joint venture for its chip operations should a sale fail to materialize.

According to Financial Times, analysts described the likely sale as IBM's biggest strategic realignment in more than 20 years, involving the exit from the most technology-intensive parts of the company's business.

In January, the US company already announced the sale of its low-end server business to China's Lenovo for $2.3 billion (1.7 billion euros), as it seeks to expand its software and services businesses.

IBM is one of a few global chip manufacturers, alongside Intel and Samsung, which have spent the vast funds needed to stay on the cutting edge of the technology. However, revenue from its hardware business dropped by about 25 percent in the final quarter of 2013, which was significantly higher than the 5 percent decline in overall IBM revenues in the quarter.

Abandoning heritage?

Analysts showed themselves to be surprised by the news in comments made to Financial Times.

“It's a step away from their heritage,” Moor Insight and Strategy analyst Patrick Moorhead told the newspaper, while Rick Doherty, an expert with New York-based consultancy Evisioneering, said that 10 years from now, IBM may no longer be the tech giant it was today without its silicon division.

According to industry experts, most likely buyers would be semiconductor groups Global Foundries from the United States or Taiwan's TSMC.

uhe/ipj (Reuters, dpa)