by Hilary Niles vtdigger.org The rumored deal between IBM and chip-making rival Globalfoundries could be off, industry observers say. Alliance@IBM, the unofficial union for the tech giant, issued an unconfirmed report Tuesday afternoon that a company executive made the announcement to managers at IBM’s East Fishkill, New York, facility. Lee Conrad said the group received the update by email, and he had no further information. Mike Cadigan, the executive named, and other IBM representatives could not be reached for comment. It had been anticipated that an announcement could come along with IBM's second quarter financial report scheduled to be released at 4:30 pm Thursday.
International Business Machines Inc is said to have been in negotiations to sell its computer chip manufacturing division to Globalfoundries, the world’s second-largest semiconductor manufacturer. The subsidiary of Mubadala Technology, a multi-sector corporate network, is wholly owned by the Emirate of Abu Dhabi.
Neither IBM nor Globalfoundries has confirmed or denied gossip about the pending deal, but related reports have persisted for weeks in the national financial media.
Suspicion that GlobalFoundries would be more interested in the chip-making division’s intellectual property than its physical manufacturing plants fueled concern in Vermont, where IBM is the state’s largest private employer with more than 4,000 workers.
Scuttlebutt about the deal falling through was accompanied Tuesday by an official announcement by New York Governor Andrew Cuomo regarding a new Electronics Manufacturing Consortium.
The initiative, led by General Electric, will develop the next generation of materials used on semiconductors at the state-owned research and development facility in Albany, according to a news release. It will be managed through newly merged SUNY College of Nanoscale Science and Engineering and the SUNY Institute of Technology.
More than 100 private companies are involved. The public-private partnership will invest about $500 million, the release said.
IBM and Globalfoundries are heavily invested in technology development in the Albany area. However, the role of both companies in the consortium — if any — remains unclear. Globalfoundries ran a full-page, help-wanted ad in the Burlington Free Press last Sunday trying to recruit technicians and maintenance workers to its own new semiconductor plant in Malta, NY, near Albany. The Free Press also reported that a similar Globalfoundries ad ran in the Poughkeepsie (NY) Journal near East Fishkill looking for engineers.
In a press release in May, Globalfoundries stated its Fab 8 plant in Malta (construction began in July 2009) is now supporting multiple customers on multiple technology platforms, and stated it is completing construction on additional manufacturing facilities to support increased customer demand. Since 2009, it said the plant has created approximately 2,200 new direct jobs and expects to create an additional 600 jobs through the end of this year.
Meanwhile, IBM announced July 10 it would invest $3 billion in its chip technology, but little or none of that windfall is likely to reach the company’s plant in Essex Junction or IBM's other semiconductor plant in East Fishkill, NY, and is aimed at a non-silicon future of chip technology.
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Vermont Business Magazine contributed to this report.