IBM reports quarterly earnings on Thursday and there’s an entire town in Vermont biting its nails in anticipation.
They are wondering if they will hear news that IBM has sold its chip manufacturing facilities located there.
IBM’s chip-making business could be losing as much as $US1.5 billion a year, sources told Bloomberg. The Wall Street Journal reported back in April that IBM was contemplating getting out of the business of making semi-conductors. It said IBM’s close partner, GlobalFoundaries, was the front runner to buy the chip-making facility located in Essex Junction, VT. In June, Bloomberg reported that the two companies were close to a deal.
The plant employs about 4,000 people, according to the Vermont Blog, VTDigger.org:
IBM is Vermont’s largest private employer, with about 4,000 workers, and anxiety about the impact of the plant’s sale and potential closure is palpable.
GlobalFoundaries could really be interested in owning IBM’s chip-making intellectual property, not the actual plant, market analyst Len Jelinek told VTDigger.
IBM is looking to shed unprofitable businesses and shift more of its efforts into cloud computing.
GlobalFoundaries may not want to keep the plant open because it costs huge sums of money to update a chip-making plant and GlobalFoundaries is already building a state-of-the-art, $US10 billion microchip facility in Malta, New York, reports WPTZ Channel News 5. That facility is known as Fab 8.
GlobalFoundaries just hired Henry DiMarco, a former long-time IBMer from the East Fishkill facility, to become its new vice-president of site construction and facilities, notes The Register. And it’s been hiring IBM employees as contractors, about 200 of them so far, reports the Times Union.
But, in a really strange twist, GlobalFoundaries just took out a full-page ad in Free Press, a paper that serves the Essex Junction area, looking to hire permanent workers for Fab 8, reports WPTZ Channel 5. If GlobalFoundaries is really close to buying that facility, that ad means it is trying to poach people that will soon be working for it already.
Meanwhile, IBM just announced a $US3 billion initiative to invent the Next Big Thing in microchips, ones that uses 7-nanometer transistors, which are unfathomably small. (One nanometer is about as long as your fingernail grows in one second, according to the National Nanotechnology Initiative.)
IBM is looking to invent this technology and the manufacturing tools necessary to produce such chips, possibly using materials other than silicon. But it has not actually committed to manufacturing such chips itself. So this $US3 billion move doesn’t mean that IBM will stay its chip-making businesses, nor keep the Vermont facility open.
That’s why employees in Vermont are all watching IBM’s earnings, even though the company may not discuss the fate of the facility at all, reports the Poughkeepsie Journal.
IBM declined comment.