Bangalore: IBM Corp said it would hive off its loss-making semiconductor unit to contract-chipmaker Globalfoundries Inc to focus on cloud computing, mobile and big data analytics.
IBM will pay Globalfoundries $1.5 billion in cash over the next three years to take the chip operations off its hands, the companies said in a statement on Monday.
IBM will take a related pre-tax charge of $4.7 billion in its third quarter.
Silicon Valley-based Globalfoundries said it would take over IBM`s manufacturing operations in East Fishkill, New York and Essex Junction, Vermont, and offer jobs to substantially all IBM employees affected by the deal.
A team of semiconductor server group employees will remain with IBM.
Global Foundries is owned by the Mubadala Development Co, the Abu Dhabi government`s investment fund.
IBM is scheduled to report its third-quarter earnings later on Monday.
