IBM and GLOBALFOUNDRIES Deal!

An interesting deal was announced last week, another piece in the What is Next for GlobalFoundries? puzzle. IBM is sending up to 200 employees from their East Fishkill R&D facility to GF’s Malta R&D center in Saratoga County. The first thing that comes to my mind is 10nm! Considering GF is licensing Samsung 14nm, what else could it be?

GlobalFoundries has confirmed a contract with IBM in which technical workers now based at the East Fishkill plant will work for eight months at GlobalFoundries’ Fab8 chip plant, the Poughkeepsie Journal reported exclusively Friday. “I don’t know of anything else like this,” said Richard Doherty, research director at Envisioneering Group in Seaford, Nassau County. “There is nothing else like it I know of in the chip industry, or with IBM, where there’s been this transfer of talent.”

Last month The Wall Street Journal started the “IBM Semiconductor is for Sale” conversations citing unnamed sources (gotta love those unnamed sources):

Globalfoundries Inc. has emerged as the leading candidate to buy International Business Machines Corp.’s semiconductor-making operations, said people familiar with the matter. IBM also held talks with chip makers Intel Corp. and Taiwan Semiconductor Manufacturing Co., the people said, but TSMC has dropped out of the talks. While Intel is still involved, Globalfoundries appears to have a stronger interest, they said.

Last year IBM’s Semiconductor business shrank to less than $2B and is expected to shrink again this year to less than $1.5B so time is running out unless it is to be an asset sale. After talking to friends at Intel, TSMC, and IBM about this I have to agree that GF is the most likely candidate of the three. While TSMC could certainly benefit from having manufacturing facilities in the US, I highly doubt that they need the IBM semiconductor technology. Intel seems to be even less likely unless they just want to keep the technology away from the others.

As I mentioned before, the new GF CEO, Sanjay Jha, is a very clever man and knows the fabless semiconductor ecosystem:

Santa Clara, Calif., January 6, 2014 — Building on the successful track record of its first five years in the semiconductor industry and its continued commitment to build out its global network of manufacturing facilities, GLOBALFOUNDRIES announced today, from its new offices in Silicon Valley, Sanjay Jha has been appointed as the company’s new Chief Executive Officer. Jha has served as CEO of Motorola Mobility Inc. and as the COO of Qualcomm Inc.

Something big is cooking at GF, absolutely. Hopefully we will learn more about it next week at the 51st Design Automation Conference where thousands of semiconductor professionals will meet, collaborate, commiserate, and get signed copies of “Fabless: The Transformation of the Semiconductor Industry. I hope to see you there!