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Sign In RECOMMENDED VIEWING Investors Held Hostage by Policy Makers: Trennert ON LIVE TV NOW First Up with Angie Lau Sponsored by HEADLINES PopularLatestRecommended Based on your reading history you may like IBM Agrees to Pay Globalfoundries $1.5 Billion to Take Chip Unit Modi Uses Oil Price Slump to Ease Curbs Deterring Chevron Saudi Arabia Warns Against Incursions as Houthis Seize Post Dallas Exporting New Ebola Cases to Biocontainment Units Weak Health Protocol May Be to Blame for U.S. Ebola Cases Mitsubishi Aircraft Unveils Japan’s First Passenger Jet Gone in an Instant: How One NBA Player Lost $110M FedEx Says Its Drivers Aren't Employees Why Are Chinese Millionaires Buying Mansions in an L.A. Suburb? Why Retailers Will Love the Apple Pay Era Why Brazilian Air Travelers Pack Heavy RECOMMENDED VIDEOS Billionaire Warren Buffett Has a Doppelganger Problem IBM, SAP Form Partnership We’re Going Back into a Big Global Downturn: Albertson Deutsche Telekom, Orange Revive Talks to Sell U.K. Unit Arcadia, CA: The U.S. Town Favored by China's Millionaires X-37B: Air Force's Super-Secret Space Plane Returns to Earth BY TABOOLA Advertisements IBM Said to Resume Talks to Offload Chip Unit By Alex Barinka and Ian King Oct 7, 2014 3:23 PM CT 16 Comments Email Print Facebook Twitter Google+ LinkedIn Save Nov 2014 Mar May Jul Sep 175.00 180.00 185.00 190.00 195.00 200.00 * Price chart for INTL BUSINESS MACHINES CORP. Click flags for important stories. IBM:US182.052.21 1.23% International Business Machines Corp. (IBM) and Globalfoundries Inc. have resumed talks for IBM to offload its money-losing chip-manufacturing unit, according to a person familiar with the matter. Negotiations had broken down in July after IBM offered to pay Globalfoundries about $1 billion to take the unit, a person familiar said at the time. IBM is now willing to pay Globalfoundries more to take over the operations, the person said yesterday, asking not to be identified because the discussions are private. Getting the unprofitable chip-manufacturing operations off the books will help Chief Executive Officer Ginni Rometty reach her earnings targets, even as revenue has decreased for nine straight quarters. Jettisoning less profitable businesses -- including the $2.1 billion sale of its low-end server unit to Lenovo Group Ltd. -- allows IBM to focus on growth areas such as cloud computing and data analytics. IBM Tries to Adapt. Again. Ed Barbini, a spokesman for Armonk, New York-based IBM, declined to comment. A representative for Santa Clara, California-based Globalfoundries didn’t respond to requests for comment. Negotiations over the unit have been on-again, off-again this year, and getting rid of the division wouldn’t indicate IBM is no longer investing in the chip industry. Photographer: Drew Angerer/Bloomberg Ginni Rometty, Chairman, President and Chief Executive Officer of International Business Machines Corp. IBM wants to maintain control of the design and intellectual property of the chips it uses, a person familiar with the matter said in February. The company plans to spend $3 billion on semiconductor research and development in the next five years. Intellectual Property Bloomberg News reported in June that Globalfoundries was primarily interested in acquiring IBM’s engineers and intellectual property rather than manufacturing facilities, according to people with knowledge of the matter. Globalfoundries would have acted as a supplier for IBM’s microprocessors, the people said at the time. Globalfoundries, owned by an investment arm of the government of Abu Dhabi, had placed little or no value on IBM’s factories because they are too old. When talks broke down in July, Globalfoundries wanted to be paid about $2 billion to take the operations, enough to offset the division’s losses, a person said at the time. IBM’s microelectronics manufacturing revenue slid 17 percent in the first half of 2014, according to a company filing. That unit accounted for less than 2 percent of IBM’s $100 billion in revenue last year. The shares fell 1.8 percent to $185.71 at the close in New York. IBM is scheduled to report third-quarter earnings on Oct. 20, after the market closes. To contact the reporters on this story: Alex Barinka in New York at abarinka2@bloomberg.net; Ian King in San Francisco at ianking@bloomberg.net To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net; Pui-Wing Tam at ptam13@bloomberg.net Niamh Ring