Is IBM Really Selling its Semiconductor Business?

IBM is selling off more and more of its business. After selling its x86 server line to Lenovo, Big Blue is reportedly shopping its semiconductor business.

News reports suggest IBM has hired Goldman Sachs to search for potential suitors. The Financial Times noted the sale would be Big BlueEUs most significant strategic move since it faced a financial crisis in the early 1990s. IBM could not immediately be reached for comment.

EUIt is a step away from their heritage,EU Patrick Moorhead, an analyst at Moor Insights and Strategy, told the Financial Times. EUThis is probably their biggest strategic realignment for 20 years.EU

A Fundamental Change

We caught up with Charles King, a principal analyst at Pund-IT, to get his take on the rumor. He told us selling the semiconductor business would be a fundamental change for IBM. He doesnEUt think selling would mean IBM would stop building Power Systems or mainframe systems any time soon, but Big Blue is already a different company in 2014 than it was in 2013.

EUOne rumor suggests IBM would would sell the microelectronics division or sell the assets but maintain their chip design teams. That actually is a sensible scenario. If the assets were sold they would have to be sold to a company that IBM felt very comfortable doing business with because somebody is going to have to crank out those hundreds of thousands of Power processors and mainframe engines for them if they are not doing it themselves,EU King said.

EUThe rumor makes sense in certain ways but itEUs not like selling of an x86 server business. ThereEUs a lot more at stake, frankly, both from the standpoint of the technologies involved and also from the standpoint of the importance of those technologies in IBMEUs nearer and long-term future," he added.

Reviewing the Last Deal

In late January, IBM...

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