There’s nothing like a little industry gossip to get the juices flowing. I love it when the media churns out news articles based purely on speculation, quoting individuals who request anonymity, and publishing the names and titles of those who refuse to comment on speculation. No doubt you’ve all seen the reports being published about the lack of agreement reached between IBM and GlobalFoundries on the so-called sale of IBM’s chip manufacturing business to GlobalFoundries. What I wonder is, did GlobalFoundries and IBM ever publicly announce that they were in negotiations? So far all I can find is reference to an “anonymous source in the financial media”. Another “person with knowledge in the matter,” reported that IBM has been seeking a buyer for the division since last February. Regardless, everybody is talking about it, on and offline, and nobody is saying anything, all at the same time.
Last week, everyone was waiting on the edge of his or her seat to hear IBM’s decision about GlobalFoundries’ offer. This week, rumor has it that the offer has been rejected as too low, although the jury is out on whether that’s really the case. While the title of the article posted by Keshia Clukey, in the Albany Business Review declared boldly, “IBM Rejects Global Foundries’ Offer to Acquire Computer Chip Business“, Clukey backs off in the lead, saying GlobalFoundries “may not be purchasing IBM’s chip business after all”. She quotes Earl Mongeon, vice president of the Alliance@IBM CWA Union Local 1701 as saying “we haven’t had any confirmation at all”, and Alliance@IBM National Coordinator Lee Conrad, saying, “We have heard nothing new.” She also cites a Bloomberg Report post, which also cites un-named sources. (I’m starting to feel like I’m stuck in an episode of the West Wing, when CJ Craig was looking for the White House leak.) Personally, I think Mike Wheatley, captures the whole non-story very nicely in his blog, Silicon Angle. Bottom-line, it seems that the deal, if there ever was one, has fallen through. But no one knows for sure.
Elsewhere in the news are reports of GlobalFoundries hiring away top executives and engineers from IBM. These reports are substantiated with comments from GF executives. According to an article in the Burlington Free Press, in Burlington, VT, for those who were expecting announcement of a deal for GF to acquire IBM, the appearance of an ad of job openings at GlobalFoundries’ Malta, NY plant is confusing. And so the plot thickens. Many are saying that GlobalFoundries’ interest is only in IBM’s talent and patent portfolio, not the physical plants located in Fishkill NY, and Burlington, VT. Meanwhile, the lives of many IBMer’s hang in the balance. 7600, to be exact (according to Clukey).
There are only two things we know for sure: First, GlobalFoundries is hiring hundreds of workers to staff Fab 8 in Malta, NY. So far, they’ve hired a number of executives away from IBM, and have advertised in the Burlington, VT and New York markets, as well as Arizona, California, Oregon and Texas, and also in Boston, where Intel announced it will close a nearby fab in Hudson, Massachusetts. Heck, if I I felt like my job was in jeopardy because the future of the company I worked for was on shaky ground, I might accept an offer at an organization that was experiencing tremendous growth. Who wouldn’t?
Second, we know thatIBM announced that it is investing $3B in research and development during the next five years to create new, smaller microchips, although not necessarily to manufacture them, reports the York Times blog. Does that mean IBM is going fabless? If so, they will be looking to source their chips to a foundry, and given the strong history of partnership between IBM and GlobalFoundries, there seems to be a clear case for collaboration.
Until the companies are ready to speak for themselves, we won’t fully know what’s going on. In the mean time, we can expect the speculation to continue. ~ F.v.T.