No More IBM Chips? Company Looks to Sell Its Semiconductors

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Source: http://www.flickr.com/photos/lisboncouncil/

Source: http://www.flickr.com/photos/lisboncouncil/

International Business Machines (NYSE:IBM) is reportedly looking to sell the entirety of its semiconductor business, which would represent the biggest business shift for the company seen in over a decade, according to people familiar with the matter who spoke to the Financial Times.

The Financial Times sources said that the company has hired Goldman Sachs (NYSE:GS) to look into finding possible buyers for the business. IBM is not completely dedicated to the idea of selling, and may be interested in entering into a partnership with another company. The sources didn’t tell the Financial Times what the value of IBM’s semiconductor business is.

The news comes after last month’s sale of the company’s low-end servers to Chinese tech giant Lenovo (LNVGY.PK). Lenovo purchased IBM’s x86 server business for $2.3 billion, though the deal still needs to be approved by U.S. regulators.

IBM and Lenovo have a long history together, and Lenovo said the companies would continue to work together on the server businesses that Lenovo is acquiring from IBM. Back in 2005, Lenovo purchased IBM’s Thinkpad PC business, and has since become the world leader in PCs. Despite the company’s success in the PC realm, Lenovo is looking to expand into mobile and server technologies as the PC market worldwide continues to shrink.

Selling off the company’s semiconductor business would be a shocking change for a company that bases most of its technology on its semiconductor chips. Technology — including the artificial intelligence behind IBM’s smart computer named Watson — would not exist if not for IBM’s semiconductors. Some have gone so far to say that such a move would result in IBM moving away from the tech sphere as a whole.

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