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IBM, GlobalFoundaries Strike Historic Fab Deal

IBM values total assets and cash at $4.7 billion
10/20/2014 11:20 AM EDT
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rick merritt
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Re: Reactions?
rick merritt   10/28/2014 5:07:15 PM
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@Wilbur: Don't forget Intel still leads the pack in process tech and size...and China seems to be shifting to investing more in fabless companies than fabs these days

rick merritt
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Re: Reactions?
rick merritt   10/28/2014 5:05:37 PM
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I am very interested in following the reactions of IBM semi employees to the deal.

wilber_xbox
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Re: Reactions?
wilber_xbox   10/24/2014 1:43:06 PM
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This is potential shift of power in semiconductor industry. US is no more a leader in semiconductor innovation with the rise of FAB and desing centers in Asia. Also, with the ever rising costs, China and other country governments are more willing to invest than leaving everyting to the markets. 

chipmonk0
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Re: Reactions?
chipmonk0   10/23/2014 10:24:51 AM
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Would GF be really able to absorb and make productive use of the IBMers from the 2 Fabs ? Thus far GF mgmt has been loaded with ex Motorolans, many from its Fabs in ATX. We know how that story ended and why.

What will stop the IBMers to move en masse to TSMC if Morris Chang makes a play for them and invests in a R&D Lab in NY state or VT ? What would then stop the IBMers to not go with a proven winner ?

And to what extent is the unfamilairity of the CEO in hardware & mfg. responsible for once great US hardware co.s like HP and now IBM for these decisions to abandon strategic strengths like specialty Fabs ( IBM's SOI capability certainly qualifies )?

The similarities between HP and IBM CEOs is not PC ( politically correct ) but is an inevitable outcome of engineering in the US falling prey to social activism and boosting the unsuited. Having first destroyed manufacturing with their unwillingness to get their hands dirty, now they are agitating for more gender equality in software as well !

 

rick merritt
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Re: Reactions?
rick merritt   10/22/2014 10:52:14 PM
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Wish I could have been a fly on the wall at the GF event ;-)

AZskibum
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U.S. regulatory approval
AZskibum   10/22/2014 8:01:52 AM
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I don't think U.S. regulatory approval will be a slam-dunk. As the article mentioned, IBM fabs produce many ASICs for U.S. defense contractors & national laboratories...and GF is mostly owned by the government of Abu Dhabi.

Kevin Krewell
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Re: Reactions?
Kevin Krewell   10/22/2014 3:05:52 AM
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One speaker at a Globalfoundries event today jokingly called the money a "dowry." I'm a bit less pessimistic about the Essex Jt, Vermont fabs. Those fabs make RF and power semis, which have a higher growth TAM.

geekmaster
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Re: Reactions?
geekmaster   10/21/2014 2:54:17 PM
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Hi Kevin!
Thanks! Duh...I think, my base thinking was that when goods change hands the one receiving goods pays for it.  In this case they get the fabs and get paid for it.  This is like getting my neighbors old car and he give me money for it. What does Globalfoundries pay in this deal?

jvt2013
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Re: Are all 'Machines' gone from 'International Business Machines'?
jvt2013   10/21/2014 10:23:53 AM
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IBM is selling its semiconductor operations.  It's keeping its Server Group, so will still be making machines, and will keep some semiconductor R&D to support the server business.

rolling
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More to the story
rolling   10/21/2014 8:54:55 AM
When assessing the importance of this deal, it helps to have the facts clear.

First, 200 mm in VT is a profitable business, running will differentiated processes. GF shut down its last 2 cutting edge 200 mm fabs, in Dresden and Singapore. As the press release makes clear, adapting the Singapore fabs to make IBM processes will increase the wafer ASP and prolong the life of their remaining 200 mm assets. Second, GF should derive a significant income stream from the large IP portofolio that came with the deal. Remember that many of these patents touch ALL makers and OEMs. Third, the accounting within a large organization like IBM is murky at best. Don't forget about cost allocations (from other divisions, R/D and HQ). That alone could make the new entity cash positive. Fourth, it is true that Fishkill may not be full and more importantly, may be too small to go head on against other foundries. Finally, GF gains 5000 new trained employees, located near its own cutting edge operations. I am sure that gaining some of the IBM Semi manufacturing mojo is another under-rated benefit that GF hopes to capitalize on in the next years. It will take at least 1 year for this deal to close. Let's not rush to call this deal a dud.

 

P.S. The IBM remaining packaging factory in Bromont Canada is not part of the deal, probably because it's essential to the remaining hig-end server group (but then again so are chips and they went!).

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