GlobalFoundries completes acquisition of IBM Microelectronics business

-A A +A

GlobalFoundries completes acquisition of IBM Microelectronics business

Wed, 07/01/2015 - 9:34am -- tim

by Timothy McQuiston Vermont Business Magazine 'Orange is the new Blue' was the slogan of the day as GlobalFoundries announced Wednesday morning that it had completed its acquisition of IBM’s Microelectronics business, which includes the facility in Essex Junction, Vermont, and the approximate 3,000 employees that go with it. IBM will retain many workers in Vermont as part of the deal. IBM will give GlobalFoundries $1.5 billion and in return GlobalFoundries signed a 10-year contract to supply IBM with advanced technology. IBM had sought to sell the money-losing division for several years as it turns away from manufacturing and focuses more on high-end, high-margin business services.

At a press conference Wednesday afternoon, Janette Bombardier talks about the transition from IBM to GlobalFoundries. To her left are Mike Cadigan, the former Vice President/General Manager of the IBM Microelectronics Group and now with GlobalFoundries, and Brian Harrison, senior VP of GlobalFoundries who oversees the fabs in Vermont, East Fishkill and in Singapore. VBM Photo

GlobalFoundries is a global semiconductor developer and manufacturer. It plans to increase its manufacturing output in the acquired plants in Vermont (200mm wafer chip fab, now known as Fab 9) and in East Fishkill, NY (300mm fab, Fab 10) to go along with its own new, 300mm fab outside of Saratoga, NY. Senior Location Executive Janette Bombardier said that the Vermont site, now owned by GlobalFoundries, will have about 3,000 GlobalFoundries employees and "several hundred" IBM employees. She said GlobalFoundries is still hiring, and has been hiring (as IBM), both on the manufacturing line and for many other positions, including for engineers, in Vermont.

Bombardier will also head up the EastFishkill, NY, site, with another 2,000 employees, that IBM transferred to GlobalFoundries.

VBM Photo

The Vermont site is and will be, according to GlobalFoundries officials, the leader in ASICs technology (application-specific integrated circuit), which is the type found in cell phones and other wireless devices. This is not the highest-end semiconductor technology, but it is vital and ubiquitous in these devices.

Signage is already in place and a huge party was held Thursday afternoon, under massive tents, for employees. The festivities included speeches, food and a live band.

"The energy here is unbelievable among our employees," Bombardier said.

Governor Peter Shumlin issued this statement following the news that the deal and been finalized:

“This is great news for Vermont and a testament to the extremely innovative and dedicated workforce at the Essex Junction facility. For years, questions about the future of the IBM facility have caused anxiety for employees, state officials, community members, and many others. 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. IBM has been and will continue to be a great partner for Vermont, and I look forward to continuing to build an equally strong partnership with GlobalFoundries going forward.”

Frank Cioffi said, "We are most appreciative of all that IBM has done for Vermonters, our communities and our state. We welcome GlobalFoundries and look forward to assisting GlobalFoundries as they invest and grow in Vermont."

Cioffi is president of the Greater Burlington Industrial Corporation and Cynosure, Inc.

Aerial view of the Essex Junction plant. Photos courtesy IBM.

With the acquisition, GlobalFoundries gains differentiated technologies to enhance its product offerings in key growth markets, from mobility and Internet of Things (IoT) to Big Data and high-performance computing. The deal strengthens the company’s workforce, adding decades of experience and expertise in semiconductor development, device expertise, design, and manufacturing. And the addition of more than 16,000 patents and applications makes GLOBALFOUNDRIES the holder of one of the largest semiconductor patent portfolios in the world.

“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. “We have added world-class technologists and differentiated technologies, such as RF and ASIC, to meet our customers’ needs and accelerate our progress toward becoming a foundry powerhouse.”

RELATED STORY: IBM, thanks for the memories

Senator Patrick Leahy (D-Vermont) said: “IBM’s economic impact on Chittenden County and the State of Vermont over the past 50 years has been profound, and its Essex workforce – by far the greatest asset being acquired by GlobalFoundries – is among the most talented in the world. Even as operations at IBM in Vermont have evolved, the employees at Essex continue to innovate as world leaders in microelectronics. In an era of disruptive mergers and acquisitions, the deal to sell the Essex IBM plant to GlobalFoundries has been remarkably smooth. 

Photo lithography

“It is clear that GlobalFoundries values the technology and workforce at Essex, and we welcome them to Vermont. Vermonters look forward to this new chapter, and I will continue to work closely with GlobalFoundries to ensure that workers at Essex maintain their standing as worldwide leaders in microelectronics.”

Congressman Peter Welch (D-Vermont) said: “I’m pleased that GlobalFoundries was able to finalize the purchase of IBM Vermont, which will provide more certainty and stability for the highly skilled employees at the Essex Junction plant. I look forward to welcoming GlobalFoundries to our community and working with them to grow the company in partnership with its outstanding and proven Vermont workforce.”

Betsy Bishop, President of the Vermont Chamber of Commerce, said, "The Vermont Chamber is pleased with today’s announcement of the completion of the acquisition of IBM-Vermont by GlobalFoundries. This will result in the retention of a major employer and allow top-tier innovation to continue here in Vermont. We have worked for the last five years to build an environment that encourages tech companies to grow, including initiatives establishing a research and development tax credit, a technology lending program, a STEM hiring incentive and a first-in-the-nation law to discourage patent trolling.

“We welcome Global Foundries to the Vermont business community and believe this deal provides economic strength in the technology sector in Vermont and puts us on a path for success for the future.”

Through the addition of some of the brightest and most innovative scientists and engineers in the semiconductor industry, GlobalFoundries said the acquisition solidifies its path to advanced process technologies at 10nm, 7nm, and beyond.

In RF, GlobalFoundries now has technology leadership in wireless front-end module solutions. IBM has developed world-class capabilities in both RF silicon-on-insulator (RFSOI) and high-performance silicon-germanium (SiGe) technologies, which are highly complementary to GlobalFoundries’ existing mainstream technology offerings. The company will continue to invest to deliver the next generation of its RFSOI roadmap and looks to capture opportunities in the automotive and home markets.

In ASICs, GlobalFoundries now has technology leadership in wired communications. This enables the company to provide the design capabilities and IP necessary to develop these high-performance customized products and solutions. With increased investments, the company plans to develop additional ASIC solutions in areas of storage, printers and networking. The most recent ASIC family, announced in January and built on GLOBALFOUNDRIES’ 14nm-LPP technology, has been well accepted in the marketplace with several design wins.

GlobalFoundries increases its manufacturing scale with fabs in East Fishkill, NY and Essex Junction, VT. These facilities will operate as part of the company’s growing global operations, adding capacity and top-notch engineers to better meet the needs of its existing and new customers.

Moreover, the transaction builds on significant investments in the burgeoning Northeast Technology Corridor, which includes GlobalFoundries’ leading-edge Fab 8 facility in Saratoga County, NY, and joint R&D activities at SUNY Polytechnic Institute’s College of Nanoscale Science and Engineering in Albany, NY. The company’s presence in the northeast now exceeds 8,000 direct employees.

The Vermont bicentennial stamp with a superimposed chip.

The acquisition includes an exclusive commitment to supply IBM with some of the world’s most advanced semiconductor processor solutions for the next 10 years. GlobalFoundries also gets direct access to IBM’s continued investment in world-class semiconductor research, solidifying its path to advanced process geometries at 10nm and beyond.

For more information about the acquisition, please visit: http://globalfoundries.com/acquisition/

About GLOBALFOUNDRIES

GlobalFoundries is the world’s first full-service semiconductor foundry with a truly global footprint. Launched in March 2009, the company has quickly achieved scale as one of the largest foundries in the world, providing a unique combination of advanced technology and manufacturing to more than 250 customers. With operations in Singapore, Germany and the United States, GlobalFoundries is the only foundry that offers the flexibility and security of manufacturing centers spanning three continents. The company’s 300mm fabs and 200mm fabs provide the full range of process technologies from mainstream to the leading edge. This global manufacturing footprint is supported by major facilities for research, development and design enablement located near hubs of semiconductor activity in the United States, Europe and Asia. GlobalFoundries is owned by the Mubadala Development Company. For more information, visit http://www.globalfoundries.com.

Santa Clara, Calif., July 1 2015: GLOBALFOUNDRIES