IBM's sale of its microelectronics business is the end of an era

Rumours then surfaced in September, claiming Globalfoundries was not only set to acquire IBM's semiconductor business, but would also be paid to take it off its hands. And the rumours have turned out to be true; Globalfoundries is, indeed, being paid by IBM to acquire the business – but not all of it. Under the terms of the deal, IBM will transfer some staff out of the business to continue research into fundamental semiconductor technology and the development of future systems, but Globalfoundries will have access to the results. The decision by IBM's board to cut its semiconductor business loose shows just how far the company has changed in recent times. Commenting on the deal in the company's Q3 results, president and CEO Ginni Rometty, described the move as a significant action to exit a non strategic element of its business. Even five years ago, such a view would have been seen as almost heretical; IBM's semiconductor business had been at the heart of the company seemingly forever. Once it made sense to design and manufacture your own processors for your own computers. But times change, particularly when IBM has steadily moved out of the hardware side of computing and into software and services. Now, there's no point in having an in house manufacturing facility when most chips are made in a few leading foundries. It is, indeed, the end of an era.