(The Hosting News) – IBM announced on Monday that it will pay chip manufacturer GlobalFoundries $1.5 billion to take its costly chip division off their hands.
The deal states that IBM will pay the $1.5 billion in cash over the next three years as well as a $4.7 billion pre-tax charge for the third quarter, USA Today reports.
Additionally, GlobalFoundries will have access to IBM semiconductor patents and its operations in New York and Vermont in exchange for GlobalFoundries being IBM’s exclusive Power processor provider for the next 10 years.
IBM noted on its blog that selling their chip division will allow the company to focus on “the Power architecture, mainframe and storage systems, where it will apply IBMs vaunted research and development capabilities to differentiate its offerings,” in areas such as Big Data and cloud services.
This deal is expected to close sometime next year.