IBM paying US$1.5b to off-load chip-making unit

New York

INTERNATIONAL Business Machines Corp agreed to pay Globalfoundries Inc US$1.5 billion to take an unprofitable chip-manufacturing unit off its hands.

IBM will pay Globalfoundries the cash over three years, according to a statement on Monday. The cash portion will be partially offset by US$200 million of working capital. IBM will take a pretax charge of US$4.7 billion in the third quarter to account for the cash to Globalfoundries and a writedown on the business.